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Bitcoin crumbles as states intensify assault

Published 24 Jun 2021

Heath Behncke, our Managing Director and Portfolio Manager spoke to the The Australian Financial Review in the feature “Bitcoin crumbles as states intensify assault”, 23rd June, 2021.  Below is an extract, the full article can be accessed here.

A renewed crackdown on cryptocurrency mining in China and Iran has rattled the price of bitcoin, pushing it to its lowest level this year, and shrinking its premium over other popular coins.

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An estimated 65 per cent of the global bitcoin market is mined in China and 90 percent of the country’s mining capacity has been shut down by the state, according to China’s The Global Times.

Crypto exchanges and initial coin offerings are banned in China, but miners have largely evaded prohibition, although some provinces such as Inner Mongolia are trying to weed out the practice.

“When you get the second-largest sovereign in the world taking action, it does lead to a bit of concern,” said Heath Behncke, managing director of Holon Global Investments.

“The concentration of mining in China has been huge, but now a lot of miners are moving equipment out of China.”

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“Bitcoin’s price history and volatility is evident, and that will continue,” said Mr Behncke. “But the way I view it is, if people thought bitcoin could go to zero before, the moves by banking regulators has taken out that zero case.”

“There’s going to be vastly more broad-based access and adoption coming as a result of larger companies coming on board.”

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