Cryptocurrency dips burn speculators’ fingers
THE DECLINE in the price of major cryptocurrencies which began in December has continued in the last few days, with the prices of Bitcoin, Ethereum, and Ripple all taking a nosedive against fiat values.
Ripple, which is intended to be a platform by which large financial institutions can transfer large sums internationally, fell particularly steeply, by around 40 percent.
Bitcoin’s value at the time of writing was around US$11,000, having bounced lower than the symbolic $10,000 mark before a slight recovery.
Tales of investors who had gone into debt to finance their crypto-speculations have been circulating on social media, and cryptocurrency doomsayers have been quick to chime in.
— CNBC's Fast Money (@CNBCFastMoney) January 17, 2018
News reports attributed the slump to concerns about Chinese law authorities’ intended crackdown on crypto mining, plus comments by South Korea’s Finance Minister Kim Dong-yeo, who referred in a radio interview to an outright “shutdown of virtual currency exchanges” as one of the options his government might consider.
The Chinese government has already closed down every cryptocurrency exchange in the country, but it has been reported to be taking even more stringent measures against new forms of online trading, as well as bitcoin mining operations.
It has also become apparent that in a move probably not related to the Chinese ban, Ethereum’s co-founder Vitalik Buterin has left the China-based venture capital firm Fenbushi Capital. Buterin is known to dislike the hype surrounding cryptocurrencies as investment vehicles, stating on more than one occasion that the hype obscured cryptocurrencies’ greater and designed purpose, which is to be a positive force in society.
Fenbushi is known to be one of the few VC companies which invests solely in blockchain-enabled companies and interests, such as Ethereum. On his departure from the firm, Buterin tweeted:
*All* crypto communities, ethereum included, should heed these words of warning. Need to differentiate between getting hundreds of billions of dollars of digital paper wealth sloshing around and actually achieving something meaningful for society. https://t.co/aNpEnBNGsA
— Vitalik Buterin (@VitalikButerin) December 27, 2017
But the future of cryptocurrencies remains rosy, and in fact, may even be strengthened by the loss of popularity for crytpocurrency as an investment amongst the general population. In the more positive recent news:
- SWIFT, the international payments processing network has recently signed a memorandum of understanding with seven securities depositories to look into how blockchain can be used for post-trade processes.
- Shipping firm Maersk has been looking at blockchain and distributed technologies in partnership with IBM, considering deploying a maritime insurance product using blockchain.
- Players in the pharmaceutical industry, recently the subject of broad deregulation in mainland China, are also thought to be exploring blockchain, especially to comply with new regulatory requirements which require accurate disclosure of supply chain validity. This move is being spearheaded by Caywon Pharmaceutical and Crowdmachine, a crowd-oriented development platform for blockchain technologies.
January has traditionally seen a dip in the value of cryptocurrencies. The value of Bitcoin, in particular, has fallen for the last four years in January, and although this year’s fall has been larger than average, it is probably the burnt fingers of naive investors that have set the headline writers to frenzy, rather than the discovery of a fatal flaw in the concept of a distributed blockchain powering electronic currencies.
- Is India finally inching closer to its 5G ambitions?
- Should employees be worried about working in the metaverse?
- One in four consumers are online fraud victims in the Asia Pacific
- Optimizing operational efficiency is a prerogative for the manufacturing industry
- Driver shortages: An increasingly dire issue for e-hailing companies in Malaysia