Despite Bitcoin prices being on the up after the great dip of early 2018, the cryptocurrency has once again, plunged again by about $1,000, bringing the price to below $10,000. Bitcoin is not alone though, and a lot of other popular and major cryptocurrencies are also on the decline.
There are a few reasons as to why this has happened, but perhaps the most obvious and arguably the most significant is that the Securities and Exchange Commission (SEC) issued a statement regarding the regulation of cryptocurrencies. Combine this with one of the largest exchanges experiencing irregularities in trading activity, it does not bode well for the value of Bitcoin. The SEC are now stating that all exchanges need to register. The tightening of any type of regulation usually results in a dip in value, so this recent is not surprising. The SEC states;
“If a platform offers trading of digital assets that are securities and operates as an ‘exchange’, as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
What does this mean for the future of value of Bitcoin though? This latest statement definitely brings uncertainty. It is unsure whether the SEC actually considers major cryptocurrencies, like Bitcoin, Ripple and Ethereum as ‘securities’. Depending on who you speak to regarding this issue, you will get different answers. In actual fact, the statement is very much open to interpretation.
In the long term, it is a very good idea for the cryptocurrency industry to be more strictly regulated; but, it is important to have clear regulations, rather than the ambiguity that we are witnessing at the moment, which only results in creating volatility, and affects cryptocurrency prices – a true reflection of Bitcoin at the moment.