21.04.202107:28 Forex Analysis & Reviews: China revises its crypto policy

Bitcoin is still under bears' control given the negative fundamental background of recent days. Nevertheless, there is definitely good news as well. In general, bitcoin has only slightly corrected. It remains the number one cryptocurrency during the last 2 years. No wonder, many investors closely monitor its trajectory any change in its value causes a sharp reaction from market participants. Thus, when bitcoin has recently dropped by $10,000-15,000, panic swept across the market. However, almost all experts and analysts agree that bitcoin has already become an integral part of the modern financial system. In the future, it will only cement its position in the financial arena. Many believe that bitcoin may totally replace all fiat money, while others reckon that it will be an international currency. There is an opinion that bitcoin will simply coexist next to fiat money, other cryptocurrencies, as well as with stablecoins from central banks. Hence, bitcoin is unlikely to disappear from the market.

Recently, Li Bo, the deputy governor of the People's Bank of China, said that bitcoin should already be considered as an investment tool. This is an important milestone in cryptocurrency history as one of the largest central banks in the world accepts bitcoin and believes in its prospects. "We believe that Bitcoin and stablecoins are encrypted assets," said Li. "Encrypted assets are an investment option, not the currency itself. It is an alternative investment, not currency itself. Therefore, we believe that crypto-assets should play a major role in the future, either as an investment tool or as an alternative investment," he said. This is almost the first time that the Chinese authorities have begun to recognize bitcoin and its value, Journalist Colin Wu noted. "In the future, if any stablecoin hopes to become a widely used payment tool, it must be subject to strict supervision, just like banks or quasi-bank financial institutions are subject to strict supervision," the PBoC deputy governor pinpointed.

At the same time, the head of Ark Invest, Katie Wood, said that bitcoin could be one of the most promising innovations. In the future, it can become a new gold standard. The gold standard is a system where the value of all money is linked and backed by a certain amount of gold. According to Wood, the number of bitcoin coins will always remain the same, which will protect the cryptocurrency from depreciation, inflation, or the influence of governments or central banks on it. Earlier, analysts at ArkInvest predicted an increase in the value of bitcoin from $100,000 to $500,000 per coin. According to the experts of the investment fund, the price will depend on what the shares of bitcoin in the investment portfolios of institutional investors will be. If large companies invest only 1% of their money in bitcoin, its value can easily grow to $100,000. The investment of 6% of funds to bitcoin will lead to an increase of up to $0.5 million per coin.