Cryptos cought up in the cross fires
|The crypto market recovers slowly after last week correction, which wiped off $132 billion in valuation. The price of Bitcoin bounce back 14%, from $8,368 last Friday to around $9,550 on Monday morning. However, the momentum is fading as crypto-assets, particularly Bitcoin, is facing more and more hurdles to the broad adoption of cryptocurrencies as mean of payment.
Crypto exchanges across the planet are facing conditions that are more challenging as governments, credit card issuers and local banks keep throwing up roadblocks. Banks are making increasingly difficult for crypto exchanges to access their services. Recently, the Finnish broker Prasos found itself in a complex situation as four banks (out of five), with which Prosas is working to convert crypto to fiat currencies (in this case euro), ended their business relationship amid fears of money laundering.
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Last week, the Securities and Exchange Commission (SEC) announced that any exchange, including crypto-exchanges, has to comply with SEC rules. The news triggered a sharp sell-off that affected the entire crypto-market. Even though the regulation of crypto-assets will eventually have positive effects for investors in the long-term - such as a lower volatility - the drop in price suggests that investors are not convinced of those long-term advantages. Indeed, it could been seen as a way to delay the adoption of blockchain based solutions, especially as a mean of payment.
Indeed, banks’ business model is put in jeopardy by the blockchain technology and most them are not ready to compete with it right know. Therefore, they need to buy time and excluding crypto exchanges from the banking system is an easy way to do it.
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