Latest Chinese warning sent Bitcoin to $38 500

Bitcoin fell below the psychologically price $40 000 on Wednesday morning, May 19, amid news of new cryptocurrency bans in China.

In a few hours, Bitcoin fell by more than $4 000 and tested price $38 500. This is the lowest price since the beginning of February. Over the course of a day, the main cryptocurrency lost 12%, and over a week - more than 30%. At the time of writing, BTCUSD is trading at $39 200.

All digital coins from the top ten are also in deep minus. The cryptocurrency market has lost more than $3 billion over the past 24 hours: the total capitalization sank from $2.16 trillion to $1.8 trillion!

Bank of China issued a statement stating that digital tokens cannot be used to pay for goods and services. Moreover, financial and payment services are prohibited from specifying prices in cryptocurrencies. This was reported in the official WeChat account of the Central Bank.

However, according to deputy director of the China Development Institute analytical center in Shenzhen, the statement does not contain any specific regulatory steps. Moreover, it was compiled by industry organizations, and not by the Central Bank itself, so its significance is not so great.

Earlier, the editorial staff of BeInCrypto reported that three self-regulatory organizations of the country signed an agreement to ban crypto business.

"This is just a warning. The authorities feel that the market is overheated, there is too much speculation, so they are thinking about how to protect the interests of the people", - added Bobby Lee, founder and CEO of cryptocurrency storage solutions provider Ballet.

According to the latest Bank of America poll, "buying bitcoin" is now the most popular transaction in the world. According to Matthew J. Maley, managing director equity strategist of Miller Tabak + Co, such a bias often suggests that a correction is imminent in the market.

"Add news from China and the fall in bitcoin no longer seems surprising", - the expert noted.

Phoenix Investments is help more and more people plan for their financial future effectively. If you want to make money on such interesting moments of the market and thinking about where to invest - please, contact us.

Posted on May 19, 2021
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