Bitcoin Plunges Amidst Crackdown, Credit Card Ban

Bitcoin plunged to a three-month low on Monday, marking a 15% decline amidst a barrage of concerns. Along with a global regulatory clampdown, U.S. and British banks have prohibited the use of credit cards for bitcoin purchases, citing potential liability risks. Other cryptocurrencies, including Ethereum and Ripple, also faced substantial losses.

Digital Currency Bitcoin Plunges Amidst Regulatory Crackdown and Credit Card Ban

New York, NY - The cryptocurrency Bitcoin (BTC), widely recognized as the predominant digital asset, has experienced a significant decline of over 15% on Monday, reaching its lowest point in nearly three months. This precipitous drop stems from a confluence of concerns, including an impending global regulatory crackdown and the recent prohibition on credit card purchases of Bitcoin by major British and American banks.

During early afternoon trading on the Luxembourg-based Bitstamp exchange, Bitcoin's value plummeted to a low of $6,853.53, representing a substantial decrease of more than 50% from its peak of almost $20,000 reached in December. This recent decline marks the currency's sixth consecutive loss in the past eight trading sessions.

Bitcoin has lost approximately half of its value since the beginning of 2018, primarily due to the growing scrutiny and impending regulatory actions announced by governments and financial institutions worldwide. Notably, Bitcoin endured its worst weekly performance since 2013 last week.

Miles Eakers, Chief Market Analyst at Centtrip, a firm specializing in foreign exchange and treasury management, anticipates that this decline will continue, with the next technical resistance level being set at $5,000 per coin.

The decline in Bitcoin's value has also affected other cryptocurrencies, according to data provided by industry tracker Coinmarketcap.com. Ethereum, the second-largest virtual currency, experienced a decline of nearly 19%, reaching $703.40. Ripple, ranked third in market capitalization, also faced a decline of 14.1%, trading at 71 cents.

On Sunday, Lloyds Banking Group, a major British bank, announced its decision to prohibit customers from using credit cards to purchase Bitcoin. This move follows similar bans announced by American banking giants JPMorgan Chase & Co and Citigroup, which expressed concerns that they could be held liable in the event of a significant decline in the value of these volatile currencies.

In a concurrent development, India has revealed its plans to implement measures to prohibit virtual currencies within its payment system and to regulate the trading of crypto assets.

"Cryptocurrencies have experienced a significant loss of favor since mid-December," stated Craig Erlam, an analyst at currency broker Oanda. "Persistent negative news and speculation of increased regulation have further exacerbated the downward trend."

The cryptocurrency sector has recently come under increased scrutiny following several high-profile hacks and scams, including the theft of approximately 58 billion yen ($532.9 million) in digital currency from Tokyo-based cryptocurrency exchange Coincheck two weeks ago.

Despite the current downturn, some investors remain optimistic about Bitcoin's future. "Bitcoin has rebounded from similar crashes in the past during its brief but turbulent history," noted Dennis de Jong, Managing Director at UFX.com, an online FX brokerage firm in Limassol, Cyprus. "It would not be surprising if those predicting the end of the Bitcoin bubble are once again taken aback by a reversal of fortune."

The current market volatility surrounding Bitcoin and other cryptocurrencies underscores the uncertain and rapidly evolving regulatory landscape for digital assets worldwide. As governments and financial institutions continue to grapple with the challenges posed by cryptocurrencies, the future of these digital currencies remains uncertain.