Pan Gongsheng, a vice governor at the People’s Bank of China, has doubled down on the decision of the Chinese authorities to put a lid on cryptocurrency trading.
“If we didn’t shut bitcoin exchanges and crack down on initial coin offerings (ICOs) a few months ago, and if more than 80 percent of the world’s bitcoin transactions and financing activities were still taking place China, which was the case back in January, what would it be like today?” said the central banker at the annual financial book award ceremony, organised by China Business News (CBN) and JPMorgan Chase & Co. on Monday, Yicai Global reports.
The Chinese bank official continued by comparing Bitcoin mania to tulip mania and the dotcom bubble, both well-known as speculative bubbles.
Referring to professor Eric Pichet’s book ‘Bitcoin Heads to USD10,000: Speculative Bubble or Future Value?’ Pan Gongsheng stated that: “No one can predict how long a speculative bubble will last or when it will reach a peak”.
Pointing at the ‘scary’ future of the cryptocurrency industry, Pan Gongsheng predicts the demise of Bitcoin, quoting Pichet:
“There is only one thing left to do: Sit by the river bank and see Bitcoin’s body pass by one day.”
In September 2017, the Chinese authorities banned companies from raising money through initial coin offerings (ICOs), labelling it as an unauthorised fundraising tool.
In the past, the Chinese Yuan was among the top currencies traded against Bitcoin. The China’s main BTC exchanges – BTCC, Huobi and OKCoin – accounted for roughly 90% of the BTC trading volume globally.
Now, the ‘big three’ account for only 7% of the volume. The Chinese exchanges were forced out of the country and ceased Yuan trading. The future of Bitcoin, meanwhile, has yet to be seen.