Chinese regulator warns against needless optimism towards cryptocurrencies; Bitcoin loses 3% within hours

• BTC/USD dives below $5,000 amid bearish sentiments.
• Chinese authorities urge not to  mythologizing Bitcoin.

Bitcoin lost 3% of its value within hours, to trade at $6,455. The largest digital coin by market capitalization yielded to the global pressure, created by the news about Bancor heist. While Bitcoin is still 170% higher that a year ago, traders and investors are concerned by the lack of upside momentum  

Meanwhile, China once again expressed support for blockchain technology and aired critical views with respect to digital money.  

“We all think blockchain is an innovation with significant meaning – correct. But we shouldn’t mythologise blockchain,” said Fan Wenzhong, head of the international department of the China Banking and Insurance Regulatory Commission.

“Decentralisation is not a new trend but a loop, because the earliest human transactions were without central authorities,” he added.

At the same time,  Beijing is not so  enthusiastic about cryptocurrencies as they might pose a risk to financial stability. The government shut down all local crypto trading platforms in 2017 and continued to crack down on crypto mining.

 “Blockchain is a useful innovation but that doesn’t mean cryptocurrencies, which blockchain has given rise to, are necessarily useful,” the official said.

BTC/USD, 4-hour chart