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Bitcoin ends the week in volatile flow with China Rattling Bulls

(Bloomberg) – Bitcoin whipped into the weekend after Chinese officials warned again to crack down on cryptocurrencies. The largest digital currency fell as much as 10% to just $ 33,550 late Friday before falling back to $ 38,133. The coin hit nearly $ 30,000 earlier in the week after ending at $ 49,100 on May 14. The final blow came when the Chinese State Council reiterated its call to restrict bitcoin mining and trading. The crypto market was already rocked earlier this week by forced sales and possible tax consequences for the US: “You always have to be careful with China – never get too bullish or bearish,” said David Tawil, President of ProChain Capital. “We have to see what the regulation brings. It is one thing to say, it is another to do. “The earlier sell-off on Friday hit Bitcoin believers who were still angry after one-time proponent Elon Musk turned around and criticized the token for its energy consumption. Bitcoin is down 24% since last Friday, despite climbing from a slump on Wednesday to just $ 30,000. Other coins have also slumped – ether has fallen 38% in the last seven sessions. China aside, experts say cryptocurrency has become an asset that investors will hold for the longer term. Former US Treasury Secretary Lawrence H. Summers likened crypto to gold as a safe haven: “Crypto is here to stay and probably here to stay as a type of digital gold,” Summers said in an interview with David Westin at the Bloomberg Wall Street Week. “There is a good chance that crypto will be part of the system for quite a while.” Still, he doesn’t expect consumers to turn to Bitcoin for most of their payments, although it could become an important part of e- The sour section with Bitcoin began with Musk ceasing to accept Bitcoin payments at Tesla Inc. and trading barbs with boosters for the cryptocurrency on Twitter. China’s central bank supplemented the downtrend Tuesday with a warning against the use of virtual currencies. That the US may require crypto transactions of $ 10,000 or more to be reported to tax authorities. China has long been unhappy with the anonymity of Bitcoin and other crypto tokens, and earlier warned financial institutions would not be allowed to accept it for payment. The country is home to a large concentration of crypto miners in the world who use enormous amounts of electricity and thus run counter to the country’s efforts to curb greenhouse gas emissions. “The new guidelines from regulators – they take it seriously, they want more enforcement,” said Bobby Lee, founder and CEO of crypto storage provider Ballet, in an interview on Friday. “There is talk of looking for miners. The question is, can they all catch miners? “China’s moves this week underscore the country’s continued desire to take control of the notoriously volatile asset class. It’s something that China would prefer to see regulated by the People’s Bank of China, market observers say: “It’s not really the mining problem that’s the problem,” said Matt Maley, chief marketing strategist at Miller Tobacco + Co. This is done in the framework efforts to control risk-taking in their markets, but it really is a signal that China will not be a huge market for cryptos unless it is a PBOC controlled market. “In the meantime, volatility in Bitcoin is likely to remain elevated. Friday’s sell-off has pushed Bitcoin below its average price again for the past 200 days, which some chartists and technical analysts believe suggests the trend could drop further to around $ 30,000, where it found support earlier this week. This week’s volatility has resulted in huge liquidations by leveraged investors and damaged the narrative that as the sector matures, cryptocurrencies become more stable. Musk’s actions showed how few tweets can enliven the entire market. But what’s more, the past few days have renewed the regulatory threat on the crypto market: “Investors underestimate the regulatory risk of crypto as governments defend their lucrative monopolies on currencies,” said Jay Hatfield, CEO of Infrastructure Capital Advisors in New York. In the US, the potential for transaction reporting could be the “tip of the iceberg” of potential treasury rules for virtual currencies, he said. (Adds Summers’ comments in the seventh paragraph.) For more stories like this, visit bloomberg.comSubscribe Now, stay up to date with the most trusted business news source. © 2021 Bloomberg LP

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