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Welcome to Crypto Currently. A few times a week we'll round up the latest developments in cryptocurrencies around the world and try to make sense of it all. What's happening and where is it going? Let's find out…And so the great crypto roller coaster rolls on. After the dizzying heights of December, January 2018 has started with a splutter that’s become a good old-fashioned stampede to the exits. Over the course of this week, Bitcoin has plunged a full 32 percent, only to recover to 15 percent below where it started. Ripple has lost a whopping 41 percent and staged a late rally to end up 23 percent down, while Ethereum has lost 28 percent and hardly recovered at all.All up more than AU$187 billion of theoretical value has evaporated into thin air. Distraught crypto traders this week have taken to Reddit to share their thoughts and wallow in despair. “How to become a Bitcoin millionaire?” asked one. “Start as a Bitcoin billionaire.”Sadly, another of the more popular posts provided contact details for a suicide hotline.So what the hell just happened?Well, if you strip away the market noise, most of the recent bearishness comes down to fears about regulation. This has been most reported in China and South Korea, but Western governments are making just as much concerned noise. Last month the Securities and Exchange Commission (SEC) in the US filed charges against crypto startup PlexCorps for its role in an Initial Coin Offering (ICO) that was “falsely promising a 13-fold profit in less than a month.”SEC Chairman Jay Clayton issued a statement in which he urged investor caution and reminded potential ICO buyers that, “No initial coin offerings have been registered … If any person today tells you otherwise, be especially wary.”Basically, cryptocurrency has moved from the basements of the dark web to the scrutiny of front page of the newspaper, and in doing so it has attracted the attention of governments and regulators from around the world. If governments decide to call time on anonymous and decentralised cryptocurrencies, they will find ways to make them less useful and therefore less valuable.And here we have the catch-22. That is, the more cryptocurrencies rise in value, the more they attract attention. Then, as more investors pour in off the streets and put their hard earned money into something they often don’t understand, the more governments (whose job it is to protect the layman) will increasingly impose regulation.In this way, crypto is basically a victim of its own success. Is there is “equilibrium point” where crypto is valuable enough to ignite the imaginations of its devoted followers, yet not large enough to worry government? Time will tell.Simon is on Twitter
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