Published On: Tue, Feb 6th, 2018

Bitcoin price WARNING: Expert says bitcoin bubble has BURST | City & Business | Finance

Bitcoin price plummeted after a series of banks imposed a ban on customers using credit cards to purchase the digital currencies.

Fran Boait, from campaign group Positive Money, supports the decision by banks such as Lloyds and Bank of America and JP Morgan to issue bans on buying digital currencies. 

Bitcoin price decreased to $6,310.83 at 11:45am on Tuesday, according to CoinDesk. It saw its highest value before Christmas when it reached the monumental price of just under $20,000. 

Speaking to BBC News, Ms Boait said: “If you look at the actual trajectory of bitcoin since around 2011 when it first came on the scene. 

“The real hype and hysteria that we have seen that the rate of growth in the last year really, and then the fall again is unprecedented. 

“You know, up to £14,000 at its peak and we are already down 5,500 after just in a month. 

“So, it’s looking like this is definitely a bitcoin bubble bursting and unlikely to happen on this scale again.” 

Virgin Money has followed the lead of Lloyds Bank, who announced they would apply a ban on customers buying bitcoin and other cryptocurrencies with their credit cards. 

Lloyds told its eight million credit card customers on Monday that any attempts to buy cryptocurrencies will be blocked, prompting the price of bitcoin to fall even further from its mid-December high of $19,187 (£13,644).

Bitcoin’s popularity has caused demand to skyrocket throughout 2017, pushing other cryptocurrencies like Ripple and ethereum to also reap the benefits of the cryptocurrency craze. 

But the cryptocurrencies have also seen a huge price plummet, with its total market value dropping $67.7billion in just 24 hours.

Other UK banks are expected to introduce similar legislation within the next few weeks.

Greg Adams, the managing director of blokt.com, told Express.co.uk the law surrounding cryptocurrency is in desperate need of further clarification.

He said: “The banks are likely feeling the heat right now; they have customers that used debt to enter the market during the recent bitcoin bull run.

“Customers that entered at the top (close to $20,000) using a credit card will be panicking seeing their investments down over 60 percent.

“The law regarding buying cryptocurrency on credit is a grey area and is in need of clarity. Banks are probably worried about being liable for losses.”

Lloyds Bank said customers will only be informed of the bank should they query a blocked cryptocurrency credit card transaction.

But the financial consultancy deVere group predicts demand cryptocurrencies will “skyrocket” in the next 12 months.

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>