Cryptocurrency market loses over half a trillion dollars this year

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This fall in the value of Bitcoin comes a day after a decision of some major United Kingdom and U.S. banks to ban their customers from using credit cards to buy Bitcoin and other #Cryptocurrencies. It joined USA banking giants JPMorgan Chase & Co and Citigroup, which announced similar bans on concerns the lenders could be held liable when the volatile currencies plunge in value.

Due to back-to-back negative news since the start of the year, most currencies are down at least 70 percent from their respective record highs. The market capitalization or value of the entire cryptocurrency market fell to around $350 billion around 11:23 a.m., ET, Monday, according to data from CoinMarketCap.com.

The biggest virtual currency sank as much as 17 per cent to as low as US$5,922, before trading little changed as of 9:12 a.m.in NY, according to Bloomberg composite pricing.

As regulatory chatter continues to hammer the markets, we can expect new lows to continue coming along, with investors unlikely to be too interested in getting burnt.

The banking group said: "Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies".

Source Ars Technica
Source Ars Technica

"This is an extremely volatile market", said Iqbal Gandham, managing director at trading platform eToro. And more fraud losses can spell a major headache and financial hit for credit card companies. This is a far cry from the late 2017 value surge.

Last week's hack of Coindesk in which an estimated half-a-billion dollars' worth of Bitcoins were stolen is just one of many heists in the past, and a trend which is likely to continue moving forward. That increased profit was stoking the fire for people's fascination with cryptocurrency. On Friday, bitcoin fell below $8,000 for the first time since November 24.

On Monday, the price of Bitcoin tumbled below $7,000 (roughly Rs. 4.5 lakhs), two months after breaking through the $20,000 (roughly Rs. 12.84 lakhs) mark.

There are only really three advantages of Bitcoin and other cryptocurrencies, one is the ability to mine money for free, the second is pure speculation hoping to profit as values soar and the third advantage is the lack of regulation and ease of paying anyone anywhere in the world with no currency transfer fees.

Allegations have arisen about online coin offerings skirting the registration process with the U.S. Securities and Exchange Commission. Whether the Senate Banking Committee takes on board the comments, which are largely aligned with previous commentary from the SEC Chairman, remains to be seen, with both China and South Korea putting the pressure on other governments to do more.


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