Bitcoin ‘bound to collapse sooner or later‘, warns Russian lawmaker behind pro-crypto rules

Bitcoin will eventually fall and take Russia’s burgeoning crypto mining industry down with it, says the lawmaker responsible for creating the country’s crypto regulation.

The comments came from Anatoly Aksakov, head of the State Duma’s Committee on Financial Markets.

Aksakov was responding to Russian experts who told the Russian Parliamentary Gazette that Bitcoin prices would not rise in the near future, and could drop to $40,000 next year.

“I’ve always had reservations about this sector, since cryptocurrency is not really backed by anything,” Aksakov told the Parliamentary Gazette.

“It’s a type of hype that grew out of people’s fascination with computers and the opportunity to make money by connecting PCs to the power grid. By all the fundamental laws of economics, it’s bound to collapse sooner or later.”

Despite Aksakov’s gloomy predictions, he and the government press ahead with regulation as Russia’s crypto market continues to grow beyond $13 billion.

In the same interview, the lawmaker said he was drafting a new bill to regulate Bitcoin mining firms.

Regulation plans

The lawmaker voiced his personal reservations about the long-term future, despite taking action to further legalise crypto in Russia.

“[Crypto] is a very difficult business because the market is volatile,” Aksakov said.

“If you want to make money, this is not the best market for you. No level of expertise will help, because market fluctuations depend not on objective factors, but on a multitude of subjective issues.”

Aksakov said his committee had drafted a new crypto mining bill that aims to “legalise the industry” for firms that abide by the rules.

These will include regulations for crypto exchanges, with banks set to offer their clients crypto trading services.

The bill will also propose “penalties for illegal mining and the illegal circulation of cryptocurrency,” he said.

At the end of last year, the Russian Ministry of Justice proposed giving courts the power to jail illegal crypto miners who fail to pay tax on their earnings.

Under a 2024 law, Russians are free to mine crypto in most areas, provided they do not exceed 6,000 kWh of electricity per month.

In parts of the country that have suffered energy shortages, however, mining has been banned until 2031.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at [email protected].