There is never a dull moment in the world of cryptocurrencies as Bitcoin's rocky road continues this week, with a pronouncement by a leading bank spokesman that 'Bitcoin is a fraud'.
Banks and financial institutions obviously dislike Bitcoin and other cryptocurrencies by all means. Like any cornered animal which knows it is about to meet its demise, banks and other financial institutions will be fighting back ferociously to maintain their grip on the world's currency markets and the resulting profits.
Bitcoin has dropped back below the $4,000 mark on talk of China banning centralized cryptocurrency exchanges, not the currencies themselves neither centralized mining. This is mainly because they tend to monopolize the trading due to their low fees. The Caixin report dealt with this issue of regulatory frameworks.
Together with the ban on ICOs, it is clear that investors' worries increase.
Yesterday, in New York, JP Morgan Chase Bank Chief Executive Officer Jamie Dimon has been quoted as saying cryptocurrencies (most notably, Bitcoin) are " worse than tulip bulbs " and "Bitcoin is a fraud."
A statement like this is bound to be inflammatory and controversial. JP Morgan Chase is one of the clusters of global banking houses which caused the financial crisis by inventing instruments which ultimately led to the financial collapse of 2008. The mortgage backed securities, which they and their cohorts, invented and pushed forward to the public cost the bank around $13 billion.
Institutional's position on Bitcoin was taken seriously by the cryptocurrency community. Founded on the principle of accountability from its inception - Bitcoin was designed to be totally transparent and public. This was one of the public accusations against entities like JP Morgan Chase and other banks.
The notion of cryptocurrencies was to provide a responsible alternative in financial transactions. At the heart of Bitcoin is a transparent ledger system where every transaction is recorded, balanced against the credit or the debit, and is freely available on demand for any participants.
Although the blockchain technology is open and accountable, anybody who has used cryptocurrencies can confirm that the system is also complicated and secure.
There is an argument whether Bitcoin has been over priced recently, for something which is relatively new and untested. Natural corrections are the market's way of telling investors that they have overbought, and Bitcoin's investors are learning that the digital market is as volatile as the physical one.
Despite the understandable misgivings of the traditional financial community - and the recent doubts amongst the most ardent cryptocurrency aficionados - cryptocurrencies have already proved themselves as a viable alternative to existing currencies, and its users have developed new methods of transferring value and wealth between buyers and sellers of goods and services.
It remains to be seen if Bitcoin, ethereum, and the other cryptocurrencies can keep up the momentum…
Noble Gold specializes in IRAs and 401(k) rollovers through precious metals and cryptocurrencies investments.
This article was originally posted on FX Empire
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