Trying to pinpoint the net value of cryptocurrencies is indeed difficult. The past several months were ups and downs, with Bitcoin, the crypto fraternity’s most-famed member, reaching net value just shy of $20,000. It seemed uncanny and some people decided that things must be going really well. Not willing to pass up on any more good opportunities, daredevils took mortgages on their properties.
Of course, they couldn’t know that by 6 February 2018 bitcoin would go into a tailspin and hit $6,000. Many hopes of accumulating quick riches must have been crushed on this day and a bubble was burst, too.
Prices Headed For Collapse
Bitcoin was hardly the only currency to hit a downward spin. The market capitalization of crypto gold has collapsed cumulatively leaving little for the imagination and even less for the hopes of crypto enthusiasts. Presently, cryptocurrencies are estimated at $400 billion which is not a negligible sum, but it is quite a bit less than previous estimates.
A String Of Bad News
Whatever may have appeared as bad news in the above paragraph is not quite it. Recent weeks have been a vortex of one mishap after another. Japan authorities had to raid the premises of a popular coin exchange company, Coincheck.
The reason? Nearly $530 million were stolen from the coin exchange several weeks ago after hackers had managed to breach it via a low-security wallet.
But look across the Pacific and there is North America. US regulators have come down hard on an initial coin offering by AriseBank, a now disappeared bank with a defunct official website and little known facts to the media.
And if you feel like this about settles it, think again. Another exchange, BitConnect came under heavy regulatory fire in January when it was revealed that it used its customers’ money to invest into its own dealings. Officially, Bitconnect has been allegedly running a Ponzi scheme.
China has moved in hard on the cryptocurrency and Russia has sought to bring it into the control of its companies. Concerns have been expressed in the past how to keep Bitcoin from becoming an environmental disaster as the electrical consumption needed to mine Bitcoin will rise so much in recent future that it will equal what Denmark uses in electricity.
Some banks all over the world have been quick to ban customers from purchasing cryptocurrencies with their credit cards. In other words, Citigroup, JPMorgan Chase and Lloyds are taking a pointedly hawkish stance against cryptocurrencies.
Of course, in the churn of such times, you will see people on both end of the line. They will be the ardent supporters who will interpret the introduction of new and more stringent regulation as a backlash against a technology that may hold a lot of good.
Others, however, that are in the spectrum of pro-cryptocurrencies concede that it may be a good idea to hammer out a common framework to regulate cryptocurrencies. This is needed especially now when Bitcoin are openly used to sponsor illegal trades and rogue regimes are stealing digital gold to fund their affairs.
But hacking of exchanges is not new. If you have been around the crypto world for a bit now, you may remember the collapse of Mt Gox, a cryptocurrency exchange that come down tumbling back in 2013 and Bitcoin took a hit that reduced its value by 85%.
However, what the future may hold is not quite certain. Many people invested in Bitcoin mostly out of fear that they may miss out of one-in-a-life-time chance. Some even mortgaged their homes! Now it turns out that cryptocurrencies are a rocky ride and one that has its highs and lows.