Cryptocurrency Crash Benefits Gold

This week has been truly brutal for the entire cryptocurrency sector, with the prices of major currencies like Bitcoin and Ethereum crashing at least 30%. The overall sector has shed trillions of dollars in value.

The recent carnage for holders of digital currencies could be due to a variety of factors including profit-taking spurred by Elon Musk, an easing of inflation worries, or concerns about new regulations coming down the pike.

Bitcoin Balloon

Whatever the case may be, some of the capital that recently left the crypto space has found its way into the gold and silver markets. This trend could continue as well, with precious metals gathering strength and with Bitcoin still having plenty of room to fall further.

Bitcoin hit its lowest price since January as the People’s Bank of China has reiterated its view that the tokens cannot be accepted as a form of payment.

Since 2017, China has become an increasingly difficult adversary for cryptocurrencies and virtual products. The communist nation has banned initial coin offerings while also forcing many exchanges to move overseas.

China has been known to implement capital controls as it seeks to control the ebb and flow of currency within its borders.

A cryptocurrency can make these controls impossible to execute, however, as funds can be swiftly and easily transferred overseas.

The only digital currency that would allow China to maintain capital controls would be the issuance of its own digital currency. China has reportedly already taken steps to introduce its own digital yuan, and the country looks to become more aggressive in the space.

In addition to China, the Bitcoin and crypto markets have also been negatively impacted by comments from Tesla chief Elon Musk.

Tesla recently purchased a large sum of Bitcoin as Musk seemingly wanted to push the use of the currency. Tesla has, however, reportedly retracted the notion that it will accept Bitcoin as payment.

1 2
View single page >> |

Disclaimer: Money Metals Exchange and its staff do not act as personal investment advisors. Nor do we advise about or advocate the purchase or sale of any regulated security, listed on any ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.