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Bitcoin fanboys rally as prices tank

by on23 June 2021

Talking up the value

Bitcoin and other cryptocurrencies have experienced a major sell-off this week following China’s crackdown on the sector, but it is starting to look like the crypto fanboys are trying to talk up the currency again.

The Chinese government is shutting down Bitcoin farms in the country and the value of the currency has fallen dramatically.  It followed reports saying that China’s central bank had a meeting with banks and gave instructions to freeze all payment channels supporting cryptocurrency trading.

Around $400 billion in value has been wiped from the total digital currency market since Friday when a major Bitcoin mining hub ordered miners to shut down operations.

Normally, those who have invested shedloads in the currency take to the interwebs to try and talk up the price again with bullish rallying cries.

Nigel Green, chief executive and founder of deVere Group, said that for serious crypto investors this week has not been a major cause of concern and more a case of ‘here we go again.’

"For many investors, experienced and less experienced, the new lower prices triggered by the panic-selling, will be used as a key buying opportunity.  Even those in China – which is a major market for Bitcoin and the wider crypto sector - will find ways to navigate their way around the system and top-up their portfolios at the lower entry points.

“We can expect further pull-back in the price of Bitcoin in the near-term, which too will be used proactively by investors.”

He continued: “It’s our experience that investors are not in crypto to make a quick buck. They’re in it as a longer-term, future-first investment to create and build wealth.”

He said that the five factors driving investors towards cryptocurrencies have not gone away.  These include inflation and Bitcoin is widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.

There is still considerable institutional support for Bitcoin and global financial watchdogs are increasingly looking into establishing a regulatory framework because it is a serious financial asset and a medium of exchange.

Green said that millennials – who are beneficiaries of the largest-ever generational transfer of wealth, predicted to be more than $60 trillion from baby boomers to millennials over the next three decades – have grown up on technology. They are digital natives.  Cryptocurrencies are, by their very nature, tech-driven.

“In addition, they are decentralised, so not controlled by any financial institution – which are largely viewed as outdated and untrusted by millennials.”

Lastly, savvy investors appreciate the inherent value of digital, borderless, global currencies for trade and commerce purposes in our increasingly digitalised economies in which businesses operate in more than one jurisdiction.

“As such, cryptocurrencies are regarded as the future of money.”

Last modified on 23 June 2021
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