Incoming European regulations lead to Cryptocurrency dip
Cryptocurrency prices have fallen sharply recently as countries including South Korea, Germany and France have called for increased regulation surrounding currencies such as Bitcoin, Ethereum and Litecoin. British Prime Minister Theresa May became the latest world leader to enter the debate yesterday, stating “We should be looking at cryptocurrencies like Bitcoin very seriously, precisely because of the way they can be used by criminals."
Cryptocurrencies are a key topic of discussion at the ongoing World Economic Forum as countries finally begin to crack down on what has been an unregulated market since its inception in 2009. I spoke to cryptocurrency expert Duke Randall about why this isn’t necessarily bad for those already involved in the tech craze. “While we have seen a decrease in prices and overall market cap following Theresa May’s announcement, this is an unregulated market that has seen exponential growth from a market cap of $17 billion in early 2017 to $826 billion this month. Governments can no longer turn a blind eye especially because of the association between these currencies and criminality”.
The case for regulation was strengthened when notorious lending platform and known Ponzi scheme “Bitconnect” recently withdrew from the net and ran away with investors' Bitcoin tokens. In exchange for the Bitcoin, investors had been given tokens valued around $440 before the collapse. These are now hovering around $8 each, with many investors facing huge losses. “The Bitconnect scandal was a wake up call for many countries ”, says Randall. “In future, scams like this could be stopped at source by regulation. It is a necessary evil to protect consumers”.
The UK may seek to pass new Cryptocurrency related laws within the next few months to try and control this incredibly fast growing sector. Some investors will be worried about how severe these regulations might be but most agree that it is the only way to move closer to mass adoption.
Written by Eddie Luchford