Time and again we have come across statement “bitcoin is a bubble” from who’s who of the finance and banking world, but rarely have we heard a newspaper claiming this.
China’s biggest newspaper The People’s Daily has published an article wherein it has called bitcoin a bubble, and compared the cryptocurrency to the 17th-century Dutch tulip bulb bubble. In the report the newspaper first talks about bitcoin’s growth in 2017.
Putting in spotlight bitcoin’s volatility last year, the People’s Daily asserts it’s a fact bitcoin is a bubble. In the article the newspaper notes that bitcoin’s bubble was created by a combination of speculation, hype, mystery, and decentralization. The piece’s author, Wei Liang, even hints at possible insider trading, suggesting bitcoiners with a large amount of bitcoin manipulated investors to fuel speculation and further drive the cryptocurrency’s price up.
The rough translation of the article reads: “Irrespective of whether it is assessed on price or value, bitcoin is flooded with froth and that its advantages are only covers for speculation and cannot support its volatile price.
The article also points out that bitcoin isn’t recognized as a currency throughout the world, and that financial regulators “naturally do not regulate bitcoin as much as they do other currencies,” leaving the cryptocurrency in a “special gray area,” and uses bitcoin futures on regulated exchanges as an example of how the cryptocurrency is being protected.
This is not the first time that we have heard criticism about bitcoin as just last month People’s Bank of China (PBoC) official stated he thinks bitcoin will end up floating down a river, as a dead body.
Chinese authorities have said they won’t ‘ban’ bitcoin miners, but will remove their preferential treatment in local provinces. This means preferential policies in electricity consumption, land use, and tax cuts may soon be gone for Chinese bitcoin miners.