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Authorities in Beijing are skeptical of cryptocurrency, with state media predicting that bitcoin will become worthless as China prepares to launch its own coin.
A Communist Party-controlled newspaper in China has issued a dire forecast for the world's most popular cryptocurrency.
The Chinese Economic Daily warned investors that bitcoin's price was "on its way to zero."
According to the South China Morning Post, "Bitcoin is nothing more than a string of digital codes, and its returns primarily come from buying low and selling high."
"In the future, when investor confidence deteriorates or sovereign countries declare bitcoin illegal, it will revert to its original value, which is utterly worthless."
Since 2017, Beijing has been conducting a sustained crackdown on cryptocurrency. China declared in May of last year that digital tokens could not be used as a form of payment.
The ban requires all institutions in the country, including banks and online payment channels, to refrain from providing clients with any cryptocurrency-related services.
Regulators warned that "speculative trading" was "seriously endangering people's property and disrupting the normal economic and financial order."
Officials also warned that virtual currencies were not "backed up by real value," that prices were easily manipulated, and that trading contracts were not protected by Chinese law.
China was once home to the most prolific bitcoin mining operations in the world.
Mining capacity, however, fell to nearly zero in August 2021, when authorities launched a "full-scale" crackdown on cryptocurrency, shutting down "gigantic Chinese bitcoin mining operations," according to CNBC.
However, underground mining operations have resurfaced, and China now accounts for approximately 22% of global mining, according to data from the Cambridge Centre for Alternative Finance, as miners avoid the official ban.
The newspaper recently reported on the catastrophic collapse of stablecoins terraUSD and luna, which wiped out $US200 billion ($291 billion) from the crypto market in just 24 hours.
Beijing intends to issue its own digital Chinese yuan, known as e-yuan, in order to transition the country to a cashless society.
Bitcoin is expected to fall to $20,000 this year, a massive drop from its all-time high of $87,000.
The price of bitcoin was $29,336 this morning, down 50% from six months ago. The price of ethereum was $1678.
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