cryptocurrencies

Bitcoin tumbles to 6-week low on fears of regulatory noose tightening

Bitcoin’s spot price was slumping on Tuesday, touching a six-week low below $11,000, as the biggest cryptocurrencies came under pressure across the board.

The selloff follows reports that South Korean Finance Minister Kim Dong-yeon said banning trading in virtual currencies was “a live option.” That has added to ongoing worries about a potential crackdown in what’s considered the world’s third-largest crypto trading market.



Cryptocurrency Market Recovers After South Korea Trading Ban Fiasco

The cryptocurrency market has begun to recover after the South Korean cryptocurrency trading ban controversy led the market valuation of cryptocurrencies to fall by more than $100 billion.

Cryptocurrency Market Starting to Recover
Almost immediately after the South Korea Ministry of Justice revealed its plans to continue drafting a cryptocurrency trading ban bill, the price of almost all cryptocurrencies in the global market plunged in value. Merely hours later, the South Korea Ministry of Strategy and Finance publicly stated that it does not support and agree with the cryptocurrency trading ban proposal by the Ministry of Justice.


Is Bitcoin Really in a Bubble?

Despite bitcoin’s growing credibility among individual and institutional investors, the cryptocurrency’s skyrocketing price is causing some concern.

Investors and speculators are biting into bitcoin — in a big way. The price of the cryptocurrency surged by nearly 1,900% in 2017, to an average high of $19,499 on December 15 across major bitcoin exchanges, before plunging down to just over $13,000 a week later, according to blockchain.info. The ascent is striking especially since bitcoin emerged just eight years ago, the creation of a mysterious person or group of people named Satoshi Nakamoto. In 2009, bitcoin was worth zero.

Bitcoin’s popularity persists even though it has no intrinsic value per se. It is not backed by gold or physical assets, nor does it pay interest or dividends. Bitcoin cannot be used as money in most places. That’s why its skyrocketing price is causing concern. Fed Chair Janet Yellen called bitcoin a “highly speculative asset”; JPMorgan Chase CEO Jamie Dimon said it was a “fraud”; billionaire Warren Buffett called it a “mirage,” while Vanguard founder, Jack Bogle, told investors to “avoid bitcoin like the plague.”

“There has been a lot of hype and excitement, and that clearly has driven the price possibly away from the real utility value of the network and much more into the speculative realm,” said Christian Catalini, a professor of technological innovation, entrepreneurship and strategic management at MIT, on the [email protected] show on SiriusXM channel 111. “The floor value of bitcoin is zero. Bitcoin only has value because people believe and agree it has value.”

Much of bitcoin’s stratospheric rise was achieved last year. For years, bitcoin traded in a much lower range due to its novelty, a spate of negative news such as the 2014 hacking of the now-defunct Mt. Gox bitcoin exchange, and early link to criminal activities (Silk Road). Those same concerns are still around — a South Korean digital currency exchange recently closed down after suffering its second cyberattack. However, bitcoin’s adoption by major institutions gives it a sheen of market credibility.


Celsius to replace traditional future exchanges like CME and CBOT with crypto lenders

“Celsius, a blockchain powered lending and borrowing platform, just announced that it aims to replace big banks and futures exchanges, like the CME and CBOT, with crypto coin holders who will earn returns through lending. Using its platform, which will launch in Q1 2018, Celsius members can easily borrow coins at significantly reduced rates compared to traditional financial institutions, while lenders can earn automatic interest by holding coins in the Celsius Wallet.

Dubbed as “The Wallet That Pays Back”, registrants who deposit coins into the Celsius Wallet will receive up to 7% per year on loaned coins.



Japanese Banking Giant Wants To Prevent Another Mt. Gox

Japan’s Mitsubishi UFJ Trust and Banking is preparing to launch a service that will protect cryptocurrency holders if the exchanges they use shut down or are hacked, reports Japan-based online publication Nikkei Asian Review.

The banking giant will keep matching records from cryptocurrency exchanges of customers who opt-in for the scheme. In the event the exchange fails or is compromised, Mitsubishi UFJ will compensate its clients for their losses according to the records they maintain.

Nikkei reports that the service will start with Bitcoin trading and could launch as early as April. Crypto exchange users who opt-in to have their funds protected by the Mitsubishi UFJ will be charged a fee for the service.

However, as CEO of Tokyo-based exchange Bitbank Noriyuki Hirosue asserts, the extra fee may be an easy price to pay for those who prefer to trust traditional financial institutions:



Trade Recommendation: DigiByte/Bitcoin

The Digibyte/Bitcoin market skyrocketed after breaking resistance at 0.000006 on May 21 at Poloniex. It took the market 13 days to climb to an all-time high of 0.00002669 on June 3. That’s an astronomical 344.83% increase in value in less than half a month. Unfortunately for traders who bought at this level, sellers took advantage of Digibyte’s rapid ascent to dump their positions and take profits.