Why Bitcoin will never return to US $ 10,000 despite China’s mining ban – Health Guild News

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Bitcoin it is nearly half the value since it hit a record high of nearly $ 65,000 in April.

The cryptocurrency is now above $ 35,000 after falling to a five-month low a few weeks ago. Prices have now wiped out most of the gains made this year.

The main reason for this decline is due to Repression of China about cryptography.

Chinese mining operators forced to close and relocate operations abroad / Image credit: CNBC

“Repression by Chinese authorities against the cryptocurrency industry has scared the market, causing many traders to sell Bitcoin,” said Bobby Ong, co-founder of cryptocurrency monitoring site CoinGecko.

Mining operators in China were forced to close and relocate their mining operations abroad. Because China is the largest Bitcoin miner by hash rate (a measure of the speed of cryptographic mining hardware), this has caused Bitcoin to also lose a large amount of hash power, which makes the mining process be slower.

Bitcoin mining in China
Image credit: Quartz

Still, industry experts and observers said the current setback facing Bitcoin was bound to occur and the reduction in mining in China will be good for the cryptocurrency community in the long run.

Bitcoin due to price correction, but not a crypto winter

Price correction had to take place, as cryptocurrency mining processes have already been massively controlled by the public. Some companies like Tesla even had them stopped their participation with the crypto to defend himself.

Tesla’s Elon Musk was concerned about the rapidly increasing use of fossil fuels for mining and Bitcoin transactions, especially coal, which has the worst fuel emissions. Elon had said that Tesla will accept Bitcoin again as a form of payment when cryptographic miners use clean energy.

bitcoin
Tesla stopped its stake in Bitcoin, imploring cleaner energy practices / Image credit: Bloomberg

Jason Deane, an analyst at Quantum Economics, said that while long-term Bitcoiners see this as an extremely positive move for the network, as it could mean a cleaner energy future, short-term traders are frightened by price uncertainty.

Experts predict that Bitcoin is heading for a period of excessive reactions that will correct itself in due course.

They stressed that Bitcoin is unlikely to sink to the lows of its last bear market in 2018, where cryptocurrency was trading at US $ 3,000 levels.

The minimum Bitcoin that could go down would be between US $ 15,000 and US $ 25,000, said Victor Zhang, CEO of Alphawallet.

This is because there is now much more utility, adoption and diversification in the industry compared to three years ago.

bitcoin prices 2021
Bitcoin is heading for a period of excessive reactions that will be corrected in due course / Image Credit: Coindesk

Current Bitcoin prices around $ 30,000 are strong price support, Bobby said.

But Bitcoin prices have faced strong resistance to surpass US $ 40,000 and in order to surpass them, there needs to be enough momentum and renewed interest, he noted.

“Purchasing power has weakened significantly. If US $ 30,000 support is not maintained, we may see BTC get the next US $ 25,000 support. There are also indicators that suggest that the reversal of prices is in order … Notably, the formation of the previous reversal over the last few days has failed. “

    bitcoin price
Industry observers say lower Bitcoin could fall in the range of $ 15,000 to $ 25,000 / Image Credit: Coindesk, Vulcan Post

Furucombo COO Blake Ho added: “It’s important to keep in mind that the crypto market is not rational and is easily affected by emotions, the fear of missing a great opportunity and the fear of being the last. Therefore, short-term price volatility is often quite significant. “

“To sleep better during the market movement, it is important to diversify the portfolio … (such as) allocating some funds to stable currencies to obtain loan yields, or some in promising projects for long-term investments are examples to diversify a portfolio and reduce overall risk, ”he suggests.

China’s mining crackdown is good for the crypto community

Digital currencies are supported by a vast network of computers around the world.

In the case of Bitcoin, these computers compete to solve complex mathematical puzzles to make transactions. This process also generates new bitcoins, which reward cryptocurrency miners if they are successful.

In accordance with reports, it is estimated that more than 90% of China’s Bitcoin mining capacity is closed. It is believed that between 65% and 75% of global Bitcoin mining takes place in China.

In the last month or so, the Bitcoin hashrate has dropped from a record 180.7 million teres per second in mid-May to about 116.2 million last week, according to Blockchain.com data.

bitcoin hashrate
Bitcoin hashrate has dropped from a record reading in mid-May / Image Credit: Blockchain.com

Experts said the crackdown is actually a good development for the crypto industry.

“In the short term, there could be a sharp drop in mining power, but this will help make the Bitcoin network more resilient and decentralized. This will help mitigate one of the usual criticisms of the past where most of the rate of Bitcoin hash resided in China, ”Bobby said.

Victor said the setback will only help improve the crypto industry and its fundamentals.

“China’s mining has an insignificant impact because very few countries ban mining. In addition, they prohibit working mining tests. The gambling test can easily run on an embedded device and does not consume energy … People should focus on improving the energy source instead of cutting it off. “

    bitcoin mining china
Image credit: Forbes

Cryptography experts add that with the presence of more Bitcoin miners offline due to China’s restrictions, the share of other miners ’network will increase, which can make mining much more lucrative.

“While some countries ban mining, others increase it. Some US states, such as Texas and Florida, they welcome miners to emigrate, “Bobby said.

Future of Bitcoin

Looking at the outlook for Bitcoin, which still holds the world’s largest cryptocurrency title by valuation, Bobby thinks the Bitcoin market is expected to remain turbulent for now.

“Currently, there is no clear catalyst for the Bitcoin market … Bitcoin’s prospects will also largely depend on the macroeconomic environment and Federal Reserve statements will play an important role in determining the next movement “.

bitcoin payment
Bitcoin’s short-term outlook will depend on the US Fed and the macroeconomic environment / Image credit: the article

However, he noted that this is not the first time China has tried to ban or restrict the growth of Bitcoin and that such setbacks occur at least once a year so far.

And this new setback will make Bitcoin stronger again.

“It is impossible to completely ban Bitcoin. With each ban announcement, the network becomes more resilient and may soon be mature enough to resist being hit by this kind of news, ”Bobby said.

Bitcoin also recently blocked its first major update in four years, promising additional functionality, privacy and efficiency.

bitcoin payment
Cryptocurrency has increased its resilience and is preparing to recover stronger / Image credit: Financial tycoons

Bobby said it is very unlikely that another cryptocurrency will replace Bitcoin in the near future. “Bitcoin remains the world’s reserve cryptocurrency and is expected to remain so in the foreseeable future.”

Victor agreed and added that Bitcoin is still the best adopted cryptocurrency, as seen in countries and companies that already adopt it for daily use.


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Featured Image Credit: Dado Ruvic via Reuters





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