The View | These two theories explain why we should be bullish on the future of cryptocurrencies
The bitcoin phenomenon is a reflection of a loss of faith in – and indeed outright disdain for – the world’s political and economic elites
Last week was not a profitable one for investors in bitcoin, the world’s largest cryptocurrency by market capitalisation.
The digital asset fell 17.5 per cent to just under US$13,600 on Sunday, leaving it 31.5 per cent down from its all-time high set on December 17 following the launch of futures contracts on bitcoin by the Chicago Board Options Exchange and the Chicago Mercantile Exchange.
The leading cryptocurrencies, which have been on a roller-coaster ride over the past month amid warnings from a clutch of regulators that investors should be wary of the dangers posed by exceptionally volatile and mostly unregulated markets for the digital tokens, are incurring the wrath of officialdom.
A clampdown on trading in crypto assets, which began in China early last year due to concerns about money laundering and capital flight, is gaining momentum. Last week, the justice minister of South Korea (the world’s third-largest bitcoin market after Japan and the US) proposed to ban local cryptocurrency exchanges while Beijing went a step further by ordering provincial governments to shut down bitcoin mines, the energy-intensive computing process that allows transactions with the digital currency to take place.
The mounting regulatory hostility towards cryptocurrency trading on the part of some of the countries that gave rise to the bitcoin frenzy is fuelling volatility in the prices of the digital tokens.