What happened
It's Thursday, and cryptocurrencies are crashing. As of 10 a.m. EDT, the prices of several of the biggest names in cryptocurrency are tumbling:
- Bitcoin (BTC +0.49%) is down 4%
- Dogecoin (DOGE 1.73%) is down 6.1%
- Ethereum (ETH +1.42%) is down 7.4%
Image source: Getty Images.
So what
Why is that? Well, the most obvious answer appears to be government regulation.
In the United Kingdom for example, regulators at the Financial Conduct Authority have ordered Binance, the world's largest crypto exchange by trading volume, to post a notice on its website advising that "it is not authorized to operate in the U.K.," reports CNBC today. The news agency further notes that "customers were temporarily unable to make card withdrawals due to an issue with the U.K.'s Faster Payments system," which one would expect to make traders nervous about holding their cryptocurrency. Furthermore, local bank Barclays "has blocked customers from sending payments to the crypto exchange."
Nor are U.K. regulators the only ones meddling in the cryptocurrency market. China's aversion to crypto is by now well known. And even in the United States, high profile Sen. Elizabeth Warren, who chairs the Senate's Subcommittee on Economic Policy, has commented that she wants to see "common-sense regulations" of cryptocurrency in the U.S. Worrying that the erratic swings in the prices of cryptocurrencies such as Bitcoin, Dogecoin, and Ethereum will "end badly" for traders, she has ordered the Securities and Exchange Commission to "use its full authority" to regulate the market, and wants to hear how they plan to do it by July 28.
Now what
Long story short, while tightened regulation of cryptocurrency in the U.S. hasn't happened yet, there's now a firm date on the horizon -- less than three weeks from now -- when new regulations may be proposed.
Knowing that regulation is coming, but not yet knowing just what form it will take, has to make cryptocurrency traders at least a little bit nervous, and that nervousness is showing up in the prices of Bitcoin, Dogecoin, and Ethereum today.
