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Bitcoin: Recent Price Trends and Concerns

Bitcoin Price Volatility

Media outlets reported that the stability in the price of bitcoin was truncated last week as the value of the digital currency experienced a major decline that brought it below $7,000. Sources claim that the fall was primarily as a result of the hack of a South Korean exchange coupled with the release of a study that highlighted price manipulations as the factors that made the price of the coin high in 2017.

Bitcoin price falls as a result of South Korean exchange hack

Sources claim that the price of the digital currency had been on volatile shifts since December when its value rose over $19,850 but later dropped drastically before Christmas and almost slipped below the $11,000 benchmark in just an hour.

Reportedly, the price of the coin also dropped in the first two months of this year due to different regulations imposed by various government authorities and central banks on cryptocurrencies. Reports also indicated that the price dropped below $10,000 in March and was at a low of $6,500 before it subsequently rose to $7,000. Coinbase exchange revealed that the coin was worth $6,637 yesterday and media outlets reported that the value of the currency shifted by less than 1% since yesterday. Sources, however, claim that it had gone up with 5% when compared with its price last week, but the value of the digital currency had gone down with about 21% from its value last month.

Reportedly, the rise in the price of Bitcoin last year led to an increased interest in cryptocurrencies such as Ripple XRP, Ethereum and Litecoin,  and more people invested in these digital currencies. However, media outlets reported that the new trends were demonstrations of how things could change for crypto investors.

Other Influencing Factors

Reports revealed that the regulatory restrictions imposed by government authorities were not the only factors that caused the fall in the price of bitcoin. Factors such as high-profile thefts, including the failed Binance exchange raid, have also influenced the plummeting value of bitcoin, and other cryptocurrencies.

Also, reports stated that Google’s announcement to place a ban cryptocurrency advertisements on its search engine pages also contributed to the fall in value. In a post, Google noted that it would put a ban on the deceptive content and ads for unregulated financial products such as wallets and initial coin offerings, cryptocurrency exchanges, binary exchange and foreign exchange trading to improve the platform’s advertisement ecosystem. Facebook reportedly made a similar announcement in January and stopped all crypto advertising on its platforms, including Instagram.

Google’s announces a ban on cryptocurrency advertisements starting from June has contributed to the fall in Bitcoin price

Financial Experts Issue Warning

Financial experts have advised investors to steer clear of making investments in Bitcoin. Mark Haefele, UBS Group chief investment officer, stated that a wealth manager would not invest his fund in bitcoin because a terrorist activity in the US financially supported by Bitcoin would make the US regulators make provisions that might negatively affect the position of the investors. Jerome Powell, Federal Reserve Chair nominee, also said that bitcoin wasn’t a big deal at the moment, but he mentioned that it could affect the central bank’s transmission model in the future.

Thomas Peterffy, chairman of Interactive Brokers Group, also highlighted that giving bitcoin free rein on platforms that had to clear other derivatives before they could come up would likely cause price gyration that would affect the clearing platform.

Sources claimed that the US Securities and Exchange Commission also warned people to remain cautious and guide against cyber criminals and fraudster if they wanted to invest in cryptocurrencies. SEC advised people to ensure that they knew all the numerous dangers surrounding bitcoin investments before they made such investments.

According to the Agency, the digital currency was not under the regulation of state authorities, and transactions carried out on the platform could not be reversed. According to the Agency, once the fund left the account, it could not be retrieved. The agency mentioned that the volatility of cryptocurrency investment was high and that made it unsuitable for those who were looking to make long-term investments or for retirement purposes.

The Agency mentioned that it was working with state securities regulators to pursue violations. However, the Agency stated that if anyone lost money, the combined efforts of the agencies could not help such a person recover the investment made.  SEC also advised everyone to read the new release of the North American Securities Administrators Association (NASAA) which examined several issues relating to bitcoin and other cryptocurrencies.

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