When they say “blood on the streets” this is exactly what they mean.
In the space of 24 hours Bitcoin plummeted 26.7%, moving from $43,602 to as low as $31,926 according to CoinDesk 20 data.
This needs more context. 5 weeks ago the world’s first crypto hit all-time highs of $64,829.14
Most Bitcoin investors right now, we can only assume, would not be thinking “I wonder how high bitcoin will go?”
But Cathie Wood is no average investor. The Ark Investment Management CEO doubled down on her predictions.
“We go through soul searching in times like this…and scrape the models and yes our conviction is as high”, and when she says ‘high’ she means sticking with her previous prediction that Bitcoin will hit $500,000 USD.
Wood has been incredibly bullish on Bitcoin, recently suggesting the world’s largest crypto will “comfortably” eclipse gold’s $10 trillion market cap.
Alex Saunders has 115K Twitter followers and is the founder of Nuggets News.
He says right now, people don’t know what to do “they’re frozen at the moment…we’ve been telling people to take profits on the way up and avoid these bad projects.”
You get the feeling Crypto naysayers would be pretty pleased with themselves right now but what about the big name investors? Are they still bullish? “Oh absolutely, we’ve already seen people like Jack Dorsey (Twitter co-founder) come out, Michael Saylor (MicroStrategy co-founder) they bought more Bitcoin overnight. Nothing’s really changed” Saunders told Ticker News.
Michele Schneider of Marketgauge is also watching closely, she’s been bullish on Ethereum, and will buy back in but only when the tide turns “so as long as we don’t get back down below that $32 (thousand mark) $33…as I said we get through $40 (thousand). Volatility calms down a bit. Then I would be interested again.”
How China’s crackdown will be a game-changer for bitcoin mining
China’s crackdown on mining has been an ongoing story since around 2013. But this time might be different.
According to bitcoin aficionado Stephan Livera this latest crackdown, on one of the main regions for bitcoin mining, is the real deal.
This time seems like a more serious time. The largest mining pool operators have come out…so for example the leader of F2Pool (has said) from our numbers we’re seeing a very large drop in the amount of hash rate that’s coming to our pool out of China.”STEPHAN LIVERA, MINISTRY OF NODES
Bitcoin has many complex layers, it’s important to remember we’re talking specifically about bitcoin mining.
Mining is simply the process that sees new bitcoins entered into circulation. It’s also a critical component of the maintenance and development of the blockchain ledger. Mining is performed using very sophisticated computers that solve extremely complex computational math problems.
Chinese authorities are clamping down on the local mining operations that accounted for over 65% of Bitcoin’s global hash rate in 2020.
You might want to Google ‘bitcoin hash rate’, essentially it’s how often computers verify bitcoin transactions to secure the network.
The total hash rate has hit a new six-month low as China continues its clampdown on operations within the country.
What does this change mean for the future of bitcoin mining?
Livera says “it might be a turning point, an actual change in the industry. In terms of the composition in terms of where does the mining hash-rate come from. Because bitcoin is a decentralised project, what we ideally want to see is the hash-rate distributed around the world.”
So where to next?
Miners in China say their firms will pack up shop and move to North America with some predicting that China will lose crypto computing power to foreign markets.
Livera predicts short-term pain for long-term gain.
“Yes there is a short-term drop in the hash rate in the here and now. It’s unfortunately bad for Chinese miners. But it is good for anybody outside of China who is able to set up a mining operation, and be more profitable on the margin.”
A sell-off across the crypto markets took hold over the weekend. The world’s two dominant tokens bitcoin and ethereum both declined following China’s continuing crackdown particularly on the southwest province of Sichuan.
How these changes in bitcoin mining affect the long term price is a wait and see.
Bitcoin plummets as China continues to crack down on crypto mine closures
Bitcoin fell over the weekend, spurred by China closing a number of mines.
Bitcoin fell 5.5 percent on Sunday, as China closes in on Bitcoin mining practises.
This comes amid growing concerns over the energy usage required to mine cryptocurrencies.
This is the currency’s fourth decline in the past five sessions. Ether also tumbled.
The city of YA-AN promises to root out major crypto mining operations within 12 months
There are reports that the closure of the mines in this area has reduced the crypto’s mining capacity by 90 percent.
The crypto is currently priced at around half of what it was worth in April – with the market value falling from 2.6 trillion last month to 1.45 trillion today.
World Bank rejects El Salvador’s request to help implement Bitcoin
The World Bank has rejected a request from El Salvador to help with the implementation of Bitcoin as legal tender.
The international lender cited concerns over transparency and the environmental impact of Bitcoin mining.
Earlier this month, the Central American country announced plans to become the first nation to formally adopt digital currency.
The World Bank’s decision could mean the country faces problems in hitting its deadline to ensure that Bitcoin is accepted nationwide in the next three months.
El Salvador has become the first county to adopt Bitcoin as a legal tender
Earlier El Salvador’s President Nayib Bukele sent a law to the country’s congress proposing to make Bitcoin legal tender – that was then passed.
If approval makes El Salvador the first nation in the world to give cryptocurrency this status.
Under the legislation, prices can be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.
Salvadorian President Nayib Bukele announced in a video recording shown during the Bitcoin 2021 conference held in Miami that he has a strong belief in cryptocurrency.
“It will bring financial inclusion, investment, tourism, innovation and economic development for our country,”BUKELE SAID IN A TWEET SHORTLY BEFORE THE VOTE IN CONGRESS, WHICH IS CONTROLLED BY HIS PARTY AND ALLIES.
Bukele added that the use of Bitcoin would not bring risks to users.
“The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction,”
El Salvador’s dollarized economy relies heavily on money sent back from workers abroad. World Bank data showed remittances to the country made up nearly $6 billion or around a fifth of GDP in 2019, one of the highest ratios in the world.
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