In our view following are the Reasons for recent volatility in Cryptocurrencies:
Bitcoin markets operate 24/7, setting the stage for price swings at unpredictable hours.
Many point to bitcoin's volatility as untenable. Indeed, Bitcoin makes severe and dizzying swings.
Bitcoin had been under pressure after a series of tweets last week by billionaire Tesla Chief Executive and cryptocurrency backer Elon Musk, chiefly his reversal on Tesla accepting bitcoin as payment.
In addition, on Friday China cracked down on mining and trading of the largest cryptocurrency as part of ongoing efforts to prevent speculative and financial risks. China's Financial Stability and Development Committee, chaired by Vice Premier Liu He, singled out bitcoin as the asset it needs to regulate more. The statement, which came days after three Chinese industry bodies tightened a ban on banks and payment companies providing crypto-related services, was a sharp escalation of the country's push to stamp out speculation and fraud in virtual currencies.
U.S. Treasury Department:
China's latest campaign against crypto came after the U.S. Treasury Department called for new rules that would require large cryptocurrency transfers to be reported to the Internal Revenue Service, and the Federal Reserve flagged the risks cryptocurrencies posed to financial stability.
From India perspective, overall, I still belive that Cryptocurrencies have a brilliant future. In finance, there's the small ticket instant collateralized loan. Or the concept of securitization of loans through tokens is absolutely awesome (could happen entirely outside of crypto but it adds an internationalization layer). Or bill discounting - imagine TREDS financing, bill pools securitized, and those securities as tokens, with a strong data transparency framework. Tokens only to avoid insane bank fees on currency (Strong KYC is a MUST etc.)
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