Bitcoin price is taking a dip again as it crashed to $32,000 over fears of Chinese Central Bank denying any kind of banking and payment services access to crypto establishments. Also, the predictions made by “the big short” fame Michael Burry about the greatest stock bubble burst ever seems to be playing out as S&P 500 index continued to decline for fourth consecutive day.
Chinese Central Bank Interviews Banks & Payment Services
As if China’s crackdown on miners was not enough to crash Bitcoin Price, on June 21st early morning another FUD citing cease of banking and payment services to crypto business surfaced. Chinese and few other journalist reported that Central Bank of China (PBoC) has asked banks and payment services in China to immediately stop essential services like opening accounts, clearing and settlement etc. for crypto related businesses.
CHINA CENTRAL BANK SAYS BANKS AND PAYMENT FIRMS MUST NOT PROVIDE SERVICES INCLUDING OPENING ACCOUNTS, REGISTRATION, TRANSACTION, CLEARING AND SETTLEMENT FOR CRYPTOCURRENCY RELATED SPECULATIONS
— *Walter Bloomberg (@DeItaone) June 21, 2021
A chinese newspaper published an update in regards to this matter. As per Chinese news website, cls.com , Chinese officials interviewed various banks and payments firms to discuss virtual currency manipulation. These banks include Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Postal Savings Bank of China, Industrial Bank and Alipay (China ) Network Technology Co., Ltd. and other banks and payment institutions.
The People’s Bank of China has clearly instructed banks and payment services to halt,
“Products or services such as trading, clearing, and settlement. Institutions must comprehensively investigate and identify virtual currency exchanges and over-the-counter dealers’ capital accounts, and cut off the payment link for transaction funds in a timely manner;”
Stock Markets Continue to Fall. Is Michael Burry Right?
The US stock market prices suffered the biggest dip MoM on Friday and the stock prices continued to decline for four consecutive days. The weekly losses of S&P 500 has spiked to 1.9% which is highest since early February this year. New york times, cited the reason for downfall as,
“Investors have been adjusting their expectations for interest rates, leading to a turbulent stretch for the stock market.”
Meanwhile, Michael Burry predicted in February 2021, the greatest stock market bubble of all times and even disclosed that he is short on Tesla, one among the best performing stocks this year. For those who don’t know, Michael Burry is famous for predicting 2008 banking crisis and making millions on his shorts.
So, Will Bitcoin Follow Stock Market Crash?
Historically, Bitcoin is positively correlated with S&P 500 Stocks index meaning that a downfall in stock market will be followed by Bitcoin crash as well. Covid19 crash proved that Bitcoin is no safe haven when it comes to a widespread fall in stock prices.
Although many A rated analysts including Ark Capital’s Cathie Wood believe that bull run in stocks and bitcoin is not over and that prices will rebound later this year.
To sum it up, here’s transcript of a tweet by Michael Burry, which was later deleted. In February 2021 he predicted that stock prices will fall in coming months and that we are headed to largest stock bubble burst ever.
“$TSLA and $BTC correlation coefficient is 0.951967 over the last six months,” Burry said. “@elonmusk going for perfect unity? Nah, Elon dreams the impossible. He is determined to break unity. Correlation > 1. And he has history on his side. $TSLA and $BTC investors can make anything happen.”