Who as a kid didn’t like bouncing his coins in his pants’ pockets going to the ice cream store?
Who as an adult hasn’t had nightmares about Bitcoins becoming pocket change?
This surely looked like the scenario just 48 hours ago when Bitcoin plummeted to below $6,000 per coin.
It’s a different story today, and there are reasons for that but many investors are still licking their wounds.
Especially those in Kuwait!
Feeling the heat in Kuwait
A report in Arabic newspaper Al Anba said that average Kuwaiti investments of $10,000 had exploded in value to $70,000 by end 2017 as Bitcoin, Ethereum and Ripple all achieved all-time highs.
“Approximately 12,000 investors in Kuwait have lost half the value of their portfolios trading in the volatile cryptocurrency market,” said the paper.
Kuwait reportedly accounts for 1.5% of the total value of cryptocurrencies.
“BitFils, one the prominent local exchanges, reported that Kuwaitis were buying Bitcoin with their credit cards with an average monthly investment of $6,000,” said the daily.
According to Coin desk, US Senate Committee on Banking members and the heads of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission did a good job calming the markets about regulatory concerns over ICOs and led to observers breathing a sigh of relief.
According to Business Insider (BI), US regulators see the transformative potential within blockchain technology and cryptocurrency, but they also see a nascent market in need of more policing.
“We were expecting them to say ‘we’ve got this don’t worry, we have the authority to police these markets,’ and that’s basically what unfolded in the hearing,” said Peter Van Valkenburgh, director of research at Coin Center, in an interview with BI.
Actual Bitcoin price at print was rising from $7,825, edging towards $8,000, and still more than 50% less than December 2017 highs around $20,000.
The market for digital currency has shaved more than $480bn of value since hitting an all-time high above $800bn at the beginning of January according to Business Insider (BI). Coin desk said the recent surge meant cryptocurrency market cap, jumped nearly $100bn in 10 hours.
“The top three cryptocurrencies continued following each other, with ethereum’s ether token rising to $781 and Ripple’s XRP rising to $0.76,” said Coin Desk.
South Korea: Positive exchange
According to Financial times (FT), new Asian crypto exchanges vow to fix hacking problems and reverse government fears that led to crackdowns and accelerated the bear sentiment around cryptos.
“Cryptocurrency exchanges that promise invincibility against cyber thieves are coming to Asia in the wake of last month’s theft of $530 million from Japan’s Coincheck, the world’s largest ever cryptocurrency heist,” said FT.
“The spectre of hacking has dogged the short history of cryptocurrencies and has become a serious deterrent to trading in the market that now has a capitalisation of more than $300bn.”
Dubbed “decentralised” crypto exchanges, AirSwap and KyberNetwork, have began operation since February 1, 2018, promising 100% security from hacking.
“Decentralised exchanges do not hold investors’ funds and therefore cannot become targets of major hacks. Users keep their investments in offline storage devices that are connected to computers when trading,” said FT.
great, but who played a major part in recent carnage?
Credit card crisis
UK’s Sunday express said banks were responsible for Bitcoin being recently “crushed”.
It quoted the chair of the department of economics at Long Island University Panos Mourdoukoutas who declared that banks could have been responsible for “making the burst worse than it could have been”.
He explained: “Bitcoin is crushed, losing 38.1% of its value over a seven-day period, while Ethereum and Ripple lost 43.23% and 48.14% respectively over the same period.”
“Big banks may have something to do with both helping the bubble blow bigger and making the burst worse than it could have been.”
He said banks provided the liquidity that allowed investors to purchase Bitcoins using their credit cards with ease, through futures trading on CME, and detailed that 18.5% of people have used credit cards to purchase the cryptocurrency.
“After 22.13% of people that used credit cards to gain access to the rising Bitcoin market, banks began to cut off liquidity to virtual currencies,” he declared, and, perhaps, turning a cryptocurrency correction into a crash.”
Nouriel Roubini, chairman of Roubini Macro Associates, aks “Dr Doom” thinks the price of bitcoin is going to zero, CNBC reported.
The economist said to HODL, or “hold on for dear life” which has now become a meme in times of extreme volatility.
“HODL nuts will hold Bitcoin until it plummets to zero,” he said.
He said traders will use wash trading – someone buying and selling their own order to manipulate markets –to prop up the prices.
His tweets followed comments on Bloomberg last week in which he called bitcoin the “biggest bubble in human history”, reported CNBC.