Bitcoin has plunged below $52,000 as a spate of nasty sell-offs grip the crypto market — sparking fears that the world’s biggest digital asset could lose the psychologically important milestone of $50,000 in the process.
The downturn of 10% over the past 24 hours came despite two pieces of good news for Bitcoin: Tesla announcing that it will accept the cryptocurrency as a payment method, and Fidelity becoming the latest institution to file paperwork to launch a Bitcoin exchange-traded fund.
A strengthening dollar has put BTC under pressure this week, but there may be other dynamics at play right now. Tech stocks have also been taking a beating in recent days amid concerns over rising interest rates, prompting traders to take their capital elsewhere.
To make matters worse, a record-breaking $6 billion worth of Bitcoin options are due to expire tomorrow, an event that could make the markets even more volatile.
Could Bitcoin Be Outlawed?
There has been a growing drumbeat of regulation in the crypto space for some time, with European Central Bank President Christine Lagarde recently declaring that Bitcoin is used for “funny business.”
But in a new interview, the billionaire investor Ray Dalio — who founded the mega hedge fund Bridgewater Associates — has warned there is a “good probability” that Bitcoin could be outlawed. Speaking to Yahoo! Finance, he predicted that we could see history repeat itself, pointing to a 1934 law that banned Americans from owning gold amid fears that it could undermine the dollar. Dalio warned:
“Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control. So I think that it would be very likely that you will have it under a certain set of circumstances outlawed the way gold was outlawed.”
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