Bitcoin market meltdown prompts fresh warning in China that value of world’s leading cryptocurrency could fall to zero

State-run newspaper Economic Daily said investors should beware the risk of bitcoin prices ‘heading to zero’ amid the top cryptocurrency’s latest decline

The warning reflects Beijing’s firm stance against all cryptocurrency activities that the government has outlawed – including trading, fundraising and mining

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A woman shows a stock graph on her smartphone, with the price of bitcoin in relation to the US dollar in San Salvador, El Salvador, on July 13, 2022. Photo: Reuters

Published: 9:30pm, 22 Jun 2022

The global cryptocurrency industry’s latest meltdown has prompted fresh warning in China that the value of bitcoin could drop much further and be worth nothing, as Beijing renewed efforts to dissuade Chinese investors from all crypto-related activities.

An article published on Wednesday by the Economic Daily, a newspaper directly under the Central Committee of the ruling Chinese Communist Party, said investors should beware the risk of bitcoin prices “heading to zero” amid the recent decline of the world’s first and leading cryptocurrency.

“Bitcoin is nothing more than a string of digital codes, and its returns mainly come from buying low and selling high,” the newspaper said. “In the future, once investors’ confidence collapses or when sovereign countries declare bitcoin illegal, it will return to its original value, which is utterly worthless.”

The Economic Daily’s latest write-up comes a month after it used as an example the collapse of stablecoins terraUSD and luna to justify China’s ban on cryptocurrency trading.

Bitcoin signage is displayed during the CoinDesk 2022 Consensus Festival in Austin, Texas, on June 9, 2022. The festival showcased activities of the cryptocurrency, blockchain, NFT and Web3 ecosystems. Photo: Bloomberg

The lack of regulation in Western countries, such as the United States, helped create a highly-leveraged market that is “full of manipulation and pseudo-technology concepts”, the newspaper said. It described that as an “important external factor”, which has contributed to bitcoin’s volatility.

The fresh warning from state-run media reflects Beijing’s firm stance against all cryptocurrency activities that the government has outlawed – including trading, fundraising and mining – as the global market saw popular digital tokens lose more than half their value.