The Bitcoin price has once again enjoyed a rollercoaster ride this week, with the value of the cryptocurrency dipping 7 percent against the dollar over the last twenty four hours. Bitcoin is currently trading at just over $11,000, which represents a minor recovery from lows earlier today of $10,570.
With the Bitcoin price having peaked at almost $20,000 just a few weeks ago, it is clear that the digital payment system has nearly halved in value during 2018 trading. Indeed, the entire cryptocurrency niche has experienced challenges over the last couple of months, with both Ethereum and Ripple declining quite strongly as well.
Recent falls in the Bitcoin price can be attributed to activity in Japan. One of the largest Bitcoin exchanges in the East Asian economic powerhouse, Coincheck, has rather suddenly ceased trading. What is arguably more serious about this issue is that it has also prevented customers from withdrawing money.
No reason has been given by the Tokyo-based exchange for this decision, but it could be that Coincheck is facing political pressure from the government in Japan. Certainly regulators in East Asia have been less than positive about cryptocurrency, and activity in South Korea has also negatively impacted on the Bitcoin price worldwide.
Such an event is bound to create negative market sentiment towards Bitcoin and other cryptocurrencies, and there has been further news from the US Treasury Department that has catalyzed this phenomenon. The undersecretary for terrorism and financial intelligence within this key area of government has informed banks and financial regulators in Asia that they must make more efforts to introduce satisfactory legislation related to cryptocurrencies.
The Washington Post reported Sigal Mandelker asserting that “we need to have this kind of regulation all over the world.”
While the current Bitcoin price undoubtedly still represents a triumph for its creators, the digital currency is certainly facing its fair share of assaults over the last few weeks. Business leaders congregating at the World Economic Forum in Davos have been similarly hostile towards Bitcoin, and particularly focused on the development of the blockchain during a recent get-together.
Although the Davos forum had a positive message on the potential of the blockchain, Bitcoin was heavily criticized by the powerful elite assembled. “There is no intrinsic value for something like Bitcoin so it’s not really an asset one can analyze. It’s just essentially speculative or gambling,” Stephen Poloz, the governor of the Bank of Canada, commenting on Thursday.
Of course, it should be noted that these individuals have a vested interest by virtue of their position, and that their take on Bitcoin was always likely to be hostile. One could just as easily argue that currency itself has no intrinsic value either. Nonetheless, the biggest names in the financial world continue to speak out against Bitcoin, and this will undoubtedly have ramifications for the blockchain going forward.
“The fact that the anonymity, the lack of transparency and the way in which it conceals and protects money laundering and financing of terrorism and all sorts of dark trades is just not acceptable,” Christine Lagarde, managing director of the International Monetary Fund, commented during one particular panel at the World Economic Forum.
However, despite the general tone of hostility, several leaders in the cryptocurrency space also attended the event in Davos. They were naturally bullish on the potential of Bitcoin and the blockchain going forward, and opposed the views of some of the financial elite.
“We are still not in the kind of dotcom bubble territory in terms of the overall market capitalization,” Richard Muirhead, general partner at Fabric Ventures, suggested during a major session in Davos. Other attendees were also positive on the potential Bitcoin price, with Nic Cary, co-founder of cryptocurrency wallet Blockchain, suggesting that the protect currency niche in fact has a rosy future.
“You have to look at the fundamentals. To us, we are seeing increases in transaction volume and to me that’s one of the first indicators that more people are using this in their daily lives and that’s really interesting to me.”
Certainly the intention with Bitcoin from day one was to create a genuine currency, and in this respect the digital payment system differs from rivals such as Ethereum and Ripple. While the cost of Bitcoin may be a bubble, many believe that the underlying fundamentals of the currency mean that it will recover in the near future, and even exceed its existing peak.
Meanwhile, Robinhood, a mobile application aimed at savers, has confirmed that Bitcoin and other blockchain training services will be available from next month. Robinhood co-founder and CEO Vlad Tenev told CoinDesk: “We’ve come to understand that cryptocurrencies as an asset have exhibited clear and underlying resiliency and have integrated themselves as part of a diversified and balanced portfolio”.
So while this has been a testing time for cryptocurrency and the Bitcoin price, it does seem that there is some positive news on the horizon. And technical charts indicate that a big move on either side is imminent, meaning that the Bitcoin price will probably continue to generate headlines for some time to come.
At the time of writing, the value of Bitcoin stands at just over $11,000; still an 11-fold increase on this time last year.