What happened
It’s Tuesday, and for the second day in a row, cryptocurrencies are going down. In 10:30 a.m. EDT trading today:
So what
Why is that? As we saw last week, and as we saw yesterday, the answer appears to be government regulation and action — not just in the U.S. but around the world.
Image source: Getty Images.
In the United Kingdom, authorities just announced a “significant” operation to seize what they called laundered “proceeds of crime” in the form of cryptocurrency, according to CNN. In what the news organization is referring to as Britain’s largest-ever seizure of cryptocurrency — and one of the biggest seizures anywhere, ever — London’s Metropolitan Police confiscated $249 million worth of crypto (without divulging which kinds, specifically) allegedly linked to international money-laundering operations.
And although no one can fault authorities for investigating and confiscating any ill-gotten gains, the fact that police forces around the world are working to trace these funds suggests that crypto’s untraceability and anonymity — two big reasons why cryptocurrency got popular in the first place — are now no longer assured.
Nor is the U.K. the only source of headaches for crypto traders. In South Korea, Reuters reports that a law passed in March will require cryptocurrency exchanges to “partner with banks” and obtain a “security certificate” from the government if they want to keep doing business. The more regulations government piles onto crypto, the less attractive it might be to users — and the more expensive it will become.
Now what
Indeed, it seems traders’ enthusiasm for cryptocurrency may already be waning. According to data from the largest crypto exchanges, trading volumes for Bitcoin, Ethereum, Dogecoin, and other forms of cryptocurrency “fell more than 40% in June,” as CNBC reported yesterday.
“Half the market is gone,” a crypto research analyst told CNBC. And with buyers now in scarce supply, there’s less bidding to drive prices higher — or even support them where they’re at. Result: Cryptocurrency is now heading into the third month of a “two-month correction period,” according to CNBC. Since early May, for example, the value of Bitcoin has fallen 44%.
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