Bitcoin fell to lows of $31,780.79 on Monday amid fears that a crypto crackdown launched by China is going to be even harsher than first feared.
Beijing announced that it has summoned a number of banks and financial institutions — urging them to ramp up their efforts to identify those participating in Bitcoin transactions, and rapidly cut off their access.
In a strongly-worded statement, the People’s Bank of China added:
“Speculative trading in virtual currencies roils economic and financial order, spawns the risks of criminal activities such as illegal asset transfers and money laundering, and endangers people's wealth.”
State-owned banks including the Industrial Commercial Bank of China, as well as the popular payments platform Alipay, were among the businesses in the meeting.
All of this has further exacerbated a bearish turn that began last week when the Federal Reserve announced that it may increase interest rates earlier than planned — sending jitters through the crypto markets as well as Wall Street.
Overall, Bitcoin has fallen by about 20% in 24 hours after it failed to retain the all-important level of $40,000.
Nonetheless, there were still two bullish bits of news for traders to take comfort in.
MicroStrategy confirmed that it had purchased 13,005 BTC for $489 million — resulting in an average price of $37,617. (This means that it has already booked a paper loss of $65 million in a matter of hours.)
The acquisition has taken the company’s holdings well beyond 100,000 BTC… and it’s highly likely that its debt-driven crypto spree is far from over.
And in the hours before the latest slump, the pseudonymous trader PlanB maintained that Bitcoin’s best days lie ahead — and some rather impressive price surges are set to be seen in the coming months.
The creator of the stock-to-flow model set out the “worst-case scenario” for Bitcoin as 2021 continues: $47,000 in August, $43,000 in September, $63,000 in October, $98,000 in November and $135,000 in December.
He believes the best-case scenario would see BTC hit dizzying heights of $450,000 by the end of the year.