Bitcoin (BTC) and cryptocurrency prices have lurched back and forth over the last month with bitcoin now down around 50% from its April peak.
The bitcoin price rout was sparked by China’s latest crackdown on bitcoin and crypto miners.
Michael Saylor, the chief executive of business intelligence software company-turned bitcoin accumulator Microstrategy, has warned China’s expulsion of bitcoin and crypto miners could be a “trillion-dollar” mistake.
“I think, given the bitcoin growth rate, this will prove to be a trillion-dollar mistake for China,” said Saylor, speaking on Bloomberg TV, and pointing to China’s “50% bitcoin market share.”
“It’s a tragedy for Chinese miners [and] it’s a geopolitical mistake for China the country—but I suppose they could afford to make a trillion-dollar mistake.”
The bitcoin price has been hit in recent weeks by China’s latest bitcoin and crypto crackdown, which, along with Elon Musk’s concerns over bitcoin’s energy use, has wiped over $1 trillion from the combined cryptocurrency market.
According to the state-backed newspaper The Global Times, 90% of bitcoin mines in China’s Sichuan province were shuttered recently, sending the bitcoin price sharply lower.
China is particularly determined to put an end to every form of digital currency-related activities through enforcement of its age-long ban on trading.
The U.S. has emerged as one of the primary destinations for bitcoin miners fleeing China. Miami mayor Francis Suarez said he’s working to lower the cost of electricity in order to entice bitcoin miners to make the move to Florida.
On Monday, Microstrategy revealed it now owns more than 100,000 bitcoins after completing yet another bitcoin purchase, this time spending just under $500 million on some 13,000 coins.
Buying and selling bitcoin
The number of BTC investors or traders selling off the digital currency on a short-term basis is declining. According to Glassnode’s on-chain data, the beginning of this year saw a lot of buying actions as prices soared from a base of about $29,000 to a peak of over $64,000 by April.
But people and events – like Musk and China’s ban on Bitcoin trade – have weakened the resolve of many investors. This has prompted an aggressive sell-off that pushed prices lower by 52.38% from Bitcoin’s all-time high price above $64,863.
The rate of sell-off is growing, leaving determined, long-term holders in the bid to resuscitate the price.
Where is the bottom?
The chief investment officer (CIO) of Guggenheim Partners, Scott Minerd, is forecasting where the “real bottom” of the bitcoin price is.
He said in a recent interview with CNBC: “The real bottom, when you look at the technicals, is $10,000. That’s probably a little extreme, so I would say $15,000.”
This prediction followed his comments on Twitter when he wrote: “Look for more declines in crypto as bitcoin breaks through support. The next likely support level is $20,000.”
Minerd explained that the recent BTC price rally has been supported by significant “central bank liquidity.” He cautioned that bitcoin’s price will fall as that liquidity fades.
The price of bitcoin dipped below the $30K recently but at the time of writing, BTC stood in the $34,500 range.
Minerd has made several bearish predictions about the price of bitcoin in the near term. In May, Minerd warned of a massive sell-off in bitcoin after alerting investors to a major correction in April.
Despite his short-term bearish forecast, Minerd is bullish about bitcoin in the long run, believing that the price of the cryptocurrency could reach $600,000.
“We do a lot of fundamental research. If you consider the supply of bitcoin relative … to the supply of gold in the world … If bitcoin were to go to those kinds of numbers. You’ll be talking about $400K to $600K per bitcoin,” the CIO described.