Banks in Britain and the United States have banned the use of credit cards to buy Bitcoin and other "cryptocurrencies", fearing a plunge in their value will leave customers unable to repay their debts. It joined U.S. banking giants JPMorgan Chase & Co and Citigroup, which announced similar bans on concerns the lenders could be held liable when the volatile currencies plunge in value. From a peak of $830 billion at the start of January, the global cryptocurrency market has now shrunk to $285 billion, according to data provider CoinMarketCap.com.
"We envisage this decline will continue, setting the next technical level at $5,000 a coin", said Miles Eakers, chief market analyst at Centtrip, which specialises in foreign exchange, worldwide payments and treasury management. Previously, investors were able to make bitcoin purchases with their credit cards, but this practice was put to an end by some major players.
Garg said the exchanges which have been set up now are not regulated exchanges.
The original cryptocurrency gained more than 1,300 percent a year ago. The rationale is that if you want to speculate you should use your debit card and the banks want to protect consumers from gambling by taking on additional finance.
Despite the turmoil, Bitcoin is still up dramatically from the $1,000 it traded at a little more than a year ago.More news: Broadcom's 'best and final' $121B Qualcomm offer would be tech's biggest deal
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One of the problems experts have noted with cryptocurrency is its high potential for fraud.
The company stated that the ads that were being posted on the site were little more than scams and frauds. This is a far cry from the late 2017 value surge.
Less than two months after Bitcoin's value soared to an all-time high of almost $20,000, the cryptocurrency has started February with an equally impressive fall. That increased profit was stoking the fire for people's fascination with cryptocurrency. The market has been having many setbacks with a recent attack on a Japanese exchange which saw it lose about $530 million.
A series of black swan events made Bitcoin's price fall to its lowest rate in the last 12 weeks.
The US is likely to follow suit - on Tuesday, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) testified before the Senate regarding digital currencies. That's happened in the USA with a Dallas-based firm rolling out a large coin offering. The main reason for this is regulations on cryptocurrency trading in South Korea and China recently.