Recent Bitcoin Developments Will Be Positive For Crypto Long-Term: John Todaro

The negatively perceived Bitcoin (CRYPTO: BTC) regulations in China will end up being positive for the cryptocurrency space longer-term, Needham's John Todaro said Friday on CNBC's "Squawk On The Street."

What Happened: On June 20, China intensified its crackdown on Bitcoin mining. More than 90% of China’s Bitcoin mining capacity was estimated to be shut down after authorities in the southwestern Chinese province of Sichuan ordered a halt to crypto mining.

Todaro's Take: The network hashrate decreased by more than 50% following the Chinese crackdown on Bitcoin mining, Todaro told CNBC.

The decentralization of Bitcoin mining caused short-term volatility in crypto assets, yet it will be a positive for crypto in the long-term, he said. The miners outside of China who have been able to continue their mining operations are mining with higher profit margins, he said. 

Some of the recent price action of Bitcoin stems from trading and speculation, but much of it is from funds looking at Bitcoin as an alternative store of value to gold, he said. There are other applications outside of the trading activity in the space, including recent payment network adoption, he added.

On June 9, El Salvador lawmakers voted in favor of a Bitcoin law allowing the Central American country to adopt the cryptocurrency as legal tender.

Todaro told CNBC that he expects that China will be an outlier in the regulation of cryptocurrency and many other countries will actually have a positive impact on the space. 

Related Link: 650 US Banks To Offer Bitcoin Purchases After NCR Partnership With NYDIG: Report

Price Action: Bitcoin is up 15.86% year-to-date. 

At last check Friday, it was up 0.44% at $33,559.

Image by Serg Dementev from Pixabay.