If you’re looking for good news about Bitcoin, you’ll be hard pressed to find crypto enthusiasts nowadays.
They do exist, but their words of encouragement “buy at low prices”, “$25,000 levels by Spring”, and “as good as gold” are not only landing on deaf ears, but also replaced by genuine fears.
US billionaire Warren Buffett recently warned the Bitcoin boom will “come to a bad ending”.
The crypto market has been reeling since Jan 2018, hit by fears of a regulatory crackdown and slipping Asian volumes.
Bitcoin is now at less than half its December peak of over $20,000.
Bitcoin hit a low of $7695 Monday and now sits close to $8,000.
There are at least 5 reasons why it has had an uncushioned landing.
1- No buying bitcoins on credit cards
According to the Guardian and BBC News, Lloyds Banking Group in both the UK and US became one more financial group to ban its customers from buying Bitcoin with their credit cards.
“Financial institutions in the US made a similar move last week. Credit cards issued by Bank of America, JP Morgan Chase and Citigroup are now restricted from Bitcoin purchases due to the associated risks,” said the Guardian.
2- Criminal use
Bitcoin, originally a money laundering and drug dealing currency thanks to its anonymity has become a target of real criminals who abduct people, engage in home heists, scam digital exchanges of millions and make ransomware demands after taking over company systems.
UK Prime Minister Theresa May said at the World Economic Forum in Davos: “In areas like cryptocurrencies, like Bitcoin, we should be looking at these very seriously, precisely because of the way they can be used, particularly by criminals.”
3- Lack of regulatory controls
Warnings have been issued by regulators in the US, South Korea, China, Russia and India, about the decentralized nature of Bitcoin and cryptos in general, how they don’t store value like paper currency, and are not backed by stable assets like gold.
Last week India’s finance minister Arun Jaitley also said that the Indian government “does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.”
Germany’s Bundesbank has also called for global regulation of bitcoin and France’s finance minister wants tougher rules for cryptocurrencies.
4- Social media attacks
Facebook has banned adverts for bitcoin and other cryptocurrencies on its sites after recent criticism from users about scams and hoaxes being promoted in their newsfeed.
5- Ongoing investigations
A recent selloff was driven by an investigation into tether, a cryptocurrency that some fear has been used to inflate the value of bitcoin, said Business Insider.
By Business Inside: Markets Insider