Crypto Currently is our three-times-a-week update on digital currencies in Australia and overseas.
The last 48 hours has seen the Dow Jones bottom out in a very 2008-esque fashion, which of course has dealt another blow to cryptocurrency prices. And if there's any comfort to crypto traders at this point, it's that maybe the bottom of this disastrous phase must be close.
Yesterday, Bitcoin touched the AU$7,636 mark—a point it hasn’t been near since October last year. Ethereum collapsed to $803 while Ripple broke through the $1 mark to sit at $0.82. Almost a month ago Ethereum was fetching $1,830 while Ripple was trading at over $4. In the space of a month over 65 percent of the value of the entire cryptocurrency market—almost five and a half times Bill Gates' fortune—has evaporated into thin air, presumably leaving a lot of traders wishing they’d sold in December.
So what's going wrong with crypto? Well, quite a few things.
Fresh reports have recently emerged that China, having already banned domestic cryptocurrency exchanges, now plans to block access to foreign trading platforms. India’s finance minister Arun Jaitley also announced last week that his government didn’t “consider cryptocurrencies legal tender” and that his government intends to “take all measures to eliminate use of these crypto-assets in financing illegitimate activities.” Major banks in both the UK and the US also announced that they wouldn’t permit customers to purchase cryptocurrencies with their credit cards. If this wasn’t a big enough dampener, UK lenders have also been rejecting customers seeking home loans if they saved a deposit by investing in Bitcoin.
All these actions appear to be a concerted attempt by governments and big financial institutions to snuff out what remains of crypto-mania. Can crypto achieve mainstream uptake if the powers that be are fighting back? They may not be able to crack blockchain technology, but they can do their best to strangle the flow of money into the market, with a predictable impact on prices.
At this point it’s hard to see what might break a downward cycle for crypto prices. If governments and large financial institutions continue to take so much heat out of the market, will those who arrived on the scene early and made a fortune continue hanging around?
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