IBS Journal August 2017
15
BTCC’s Lee: cryptocurrency “running amok” without regulation
B
obby Lee, CEO of one of China’s largest Bitcoin exchanges, has said that cryptocurrencies need regulation to protect them from “running amok”.
Bitcoin and Ethereum have both experienced sudden dips in value this year. A 19% price drop for Bitcoin saw billions lost in May. A month later, Ethereum experienced a major price drop to just 10 cents momentarily.
“I think regulation is much needed for this new asset class because otherwise it’ll run amok from society,” BTCC CEO Lee told CNBC’s Squawk Box. “But the challenge is how to craft the rules around this new technology.”
Despite the need for regulation, law makers are struggling to wrap their heads around exactly how to approach Bitcoin and cryptocurrencies. The People’s Bank of China (PBOC) has made numerous attempts to regulate the market, concerned about capital flight from a country seeking to keep the renminbi strong.
The PBOC set up task forces to inspect exchanges and ensure anti-money laundering regulations were not being flouted. Buying Bitcoins on Chinese exchanges and then selling them
Bitcoin value hits all-time low – is this the final rally?
A
s the Bitcoin price hit a one-month new low of $2,272.32 in July, speculation has been spreading that this is the zenith of its upward curve and it’s all downhill from
here. Bitcoin’s market capitalisation is now approximately $12.2 billion, down from an all-time high of $3,025.47 on June 11 2017. Following the drop, the price recovered to a high of $2,354.41.
Some traders have claimed it’s all part of the scaling debate, but some are quite honestly bemused at the present plunge and others say that a small rally is likely soon.
According to CNBC, it is significantly off the $3,025.47 all-time high reached on June 11. In that period its market capitalisation has fallen by $12.2 billion.
It looks like the tide is rapidly receding on cryptocurrencies after recent rallies when Bitcoin hit its record high in June. Bitcoin had
risen 600% since the beginning of the year. Even after the latest fall, it has risen 450% year-to-date.
According to a Reuters report, Richard Turnill, BlackRock’s global chief investment strategist, said: “I look at the charts and that looks pretty scary.”
This turbulence is giving many in the market, who have been previous ambassadors for Bitcoin, the jitters. Roy Sebag, the CEO of GoldMoney, and a big investor in cryptocurrencies, said via Twitter that he had sold most of his Bitcoin holdings because the market has reached the top.
Turnill said it might be possible to view price movements in blockchain-based cryptocurrencies as influenced by the easy monetary policies that have been popular since the 2007-2009 global financial crisis.
on foreign equivalents allows investors to avoid official limits of converting the yuan into other currencies. The watchdog met with nine Bitcoin exchanges in June and instructed them to abide by regulations. In a statement, it warned that platforms could be shut down forcibly if “serious violations” occurred. When the news broke the price of Bitcoin took a 10% dive.
“It’s not really a crackdown,” Lee told CNBC. “The central bank previously was not very aware of the details of how bitcoin is utilised, how bitcoin is traded.” Central banks, he added, need to get to grips with the idea that Bitcoin is a new digital currency.
www.ibsintelligence.com
Web-dev-chris (Own work) [CC0], via Wikimedia Commons
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