Expert’s view

Bitcoin’s crash: what the experts think 

The price plunge has left some ‘chart-watchers’ nervous

Chinese burn

“When crypto prices fall, the lurches lower can be rapid,” said Adam Samson and Katie Martin in the FT. We saw as much when the price of bitcoin plunged by 12% in a day on Tuesday, taking the price below $30,000 for the first time since January and dragging down many other “alt-coins”, including ethereum and dogecoin, with it.

The “dominant driver”, according to Michael J. Saylor of MicroStrategy, was further regulatory pressures from China – once the centre of bitcoin production – which has banned the “mining” of bitcoins in major provinces. The country’s central bank has also warned several of the largest state-owned banks and Jack Ma’s Alipay to “identify” and “block” bitcoin transactions. 

Death crosses

Bitcoin recovered some ground midweek, said Bloomberg, rising to $34,000 on Wednesday. But it is still down by almost 50% since its April peak of $65,000 – and that has got some “chart-watchers” nervous. “Any meaningful break below $30,000 is going to make a lot of momentum players throw in the towel,” said Matt Maley of Miller Tabak + Co. According to Sean Rooney of Valkyrie Investments, “bitcoin traders could find themselves in choppy waters for weeks to come”.

Traders are muttering about “death crosses” (an ominous chart pattern), said The New York Times. But crypto supporters are still looking “past short-term pain”. Some are optimistic that mine operators will move to the US – particularly Texas, where the governor, Greg Abbott, is promising to make the state a “crypto-leader”, said the Daily Express. There’s also hope in El Salvador, which has adopted bitcoin as legal tender. “China doesn’t have the moral character to mine bitcoin,” said pundit Max Keiser. “America and El Salvador do.” 

Harsh lessons

One of the more remarkable findings of the UK financial regulator’s report on cryptocurrencies is that 2.3 million adult Britons are now invested – up from 400,000 a year ago, said Nils Pratley in The Guardian. “The most extraordinary”, though, is that 12% of consumers think crypto investments are “protected”. Nope. “If you lose your shirt on bitcoin, you are not going to be compensated.” There may be some harsh lessons learned this week.

Recommended

The Battle of Stonehenge: what to know about the controversial £1.7bn tunnel project
Stonehenge traffic
In Depth

The Battle of Stonehenge: what to know about the controversial £1.7bn tunnel project

Recipe of the week: Classic guacamole
Guacamole recipe taken from Ciudad de México
On the menu

Recipe of the week: Classic guacamole

Best properties: European getaways on the market
European getaways on the market
The wish list

Best properties: European getaways on the market

July podcast picks: the Olympics, camping and children’s shows
Clockwise from top left: Anything but Footy, Blind Landing and the Natural History Museum’s Wild Crimes
In Review

July podcast picks: the Olympics, camping and children’s shows

Popular articles

Why your AstraZeneca vaccine may mean no European holidays
Boris Johnson receives his second dose of the Oxford-AstraZeneca vaccine
Getting to grips with . . .

Why your AstraZeneca vaccine may mean no European holidays

‘Wobbling’ Moon will cause worldwide flooding, Nasa warns
Flooding in Florida after Hurricane Irma hit in 2017
Why we’re talking about . . .

‘Wobbling’ Moon will cause worldwide flooding, Nasa warns

Does the Tokyo Olympics branding amount to cultural appropriation?
BBC Tokyo Olympics trailer
Expert’s view

Does the Tokyo Olympics branding amount to cultural appropriation?

The Week Footer Banner