Moscow and Beijing are going to crack down on bitcoin, resulting in the cryptocurrency’s collapse next year, predicts Saxo Bank. The bank is famous for its ‘outrageous’ predictions published each December.
Saxo predicts that in 2018, bitcoin will surge to $60,000 with a market capitalization exceeding $1 trillion. After that, Russia and China will join together to attack it.
“The rise of bitcoin and other cryptocurrencies has been one of the most spectacular phenomena of financial markets in recent years. Bitcoin will continue to rise – and rise high – during most of 2018, but Russia and China will together engineer a crash,” the Danish bank predicts.
After that, bitcoin will collapse to $1,000 by 2019, according to Saxo.
At the end of 2016, the bank made a correct prediction about the rise of bitcoin. It forecast that the price of cryptocurrency would triple from the $700 level seen last year.
However, Saxo failed to predict the magnitude of the bitcoin mania, which resulted in a 1,900 percent rally to the record high of $19,000.
China has already cracked down on bitcoin by banning initial coin offerings (ICOs). Chinese regulators also prohibited bitcoin exchanges in September after Beijing suspected cryptocurrency trading was used for moving money out of the country. China has lost 90 percent of all bitcoin trade. The cryptocurrency tumbled on the news, but has quickly recovered and has continued growing.
In Russia, bitcoin and other digital money are not regulated at all. The Russian government has been ordered by President Vladimir Putin to regulate cryptocurrencies by July next year.
The Russian Finance Ministry insists that creation of bitcoin and other digital money should be illegal, because their mining has similarities to financial pyramids, which are forbidden in Russia. However, buying cryptocurrencies would not be punishable by law, the ministry promised.