Bitcoin in all kinds of trouble: Saudi watches ‘perfect storm’ from sidelines

February 2, 2018 3:09 pm


There are still Bitcoin evangelists who believe and preach faith in the cryptocurrency saying it is bound to hit, $25,000, $50,000, $100,000 and even $1million per coin.

For now, Bitcoin owners are watching their hard earned money go down in flames as the digital currency dips to near $8,500 levels.

The latest hard hitting news came from India, to add to regulatory countermeasures in South Korea, China, Japan and even the US, similar to what weather forecasters call the ‘Perfect Storm’.

The dark horse in the equation is Saudi Arabia, who has relatively silently watched from the sidelines the developments taking place, without banning any transactions on its territories.

So where does Bitcoin stand?

Below $9,000

CNBC reported that Bitcoin dropped Thursday to trade below $9,000 falling nearly 13% to a low around $8,810 on US’s Coinbase.

The digital currency has fallen by another 5% this morning to $8,521.

CME’s and CBOE’s bitcoin futures contracts for February both fell below $9,000 as well and hovered around $8,900 in afternoon trading.

Related: Lights off for Bitcoin party: The road to $100 (not $0) price has began

Bitcoin performance in the last 24 hours- Source: Coinbase

The drop came after comments from India’s minister of finance, Arun Jaitley, that raised concerns about increased regulation on cryptocurrencies in the country.

India’s Jaitley said in a speech Thursday that the government “does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system,” according to a transcript from The Hindu

“The New York Times also reported Wednesday that an increasing number of digital currency investors are worried the price of bitcoin and other digital currencies have been inflated by cryptocurrency exchange Bitfinex, which is included in CoinDesk’s price index,” said CNBC.

Fundstrat’s Tom Lee, the only major Wall Street strategist to issue formal price targets on bitcoin, said two weeks ago that $9,000 is a “major low” for bitcoin and “the biggest buying opportunity in 2018.”

In that Jan. 18 report, Lee also raised his year-end price target for bitcoin to $25,000.

Fortune said that  digital currencies have also been hit by the news that Facebook is banning all adverts for cryptocurrencies.

Must Click: Crypto apocalypse: Malware epidemic, death threats, missiles, heists and doom

More investor doubts: Barking at the wrong tree

Coin telegraph said that Jordan Belfort, aka “Wolf of Wall Street”, has yet again cast doubt on Bitcoin.

Belfort does think that the way the cryptocurrency was built is a “perfect storm for manipulation”.

“Something [BTC] was designed to be used as a currency, and it’s being used as an investment vehicle […] As a currency, Bitcoin is no more useful at $20,000 or $100.”

Belfort predicts that while Bitcoin is, in his words, a “wolf in sheep’s clothing,”  it also “might go to $50,000” before what he is certain will be its eventual fall to 0 (zero).

Saudi: enigma

According to Business Insider (BI), Saudi is working on an official policy for Bitcoin but a ban is unlikely.

“South Korea’s ban on anonymous bitcoin trading accounts went into effect Tuesday while the US Securities and Exchange Commission halted a $600 million initial coin offering (ICO),” said BI adding “But one country’s regulators are taking a more laissez faire-approach to cryptocurrencies: Saudi Arabia.”

Read: A Saudi detainee, no one is talking about, to pay $billions before release

Mohammed ElKuwaiz, the chairman of Saudi Arabia’s Capital Markets Authority, said in an interview with Business Insider that officials there are paying close attention to the space, without trying to hinder activity in the market.

“Not unlike most other markets, the regulators in Saudi have been following developments with cryptocurrencies with great interest, and we are still evaluating what our appropriate regulatory response should be,” ElKuwaiz said.

“A ban on cryptocurrencies, is not likely.”

BI said a number of cryptocurrency companies claim to offer services in the kingdom, such as Paxful, which says it has sold over 10,000 Bitcoins in the country or BitOasis, which serves users across the Middle East and North Africa.

In December 2017, central banks in Saudi Arabia and the UAE launched a pilot program to test how a new digital currency could be used to facilitate cross-border payments.

 

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Hadi Khatib
By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.



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