According to the European Union, The Bubble’s About to Burst 4 1543

It’s been a choppy few weeks for crypto since the sharp rise and fall of Bitcoin value in December last year. And if that wasn’t bad enough, things have steadily gotten worse, with the China full cryptocurrency ban and large banks, including Citi and Bank of America, refusing to allow clients to buy crypto with their credit cards.

Next up for the struggling digital currency, is a scathing attack from the European Union, averting investors of Bitcoin and other digital currencies that the bubble will soon burst and that they could lose most, or even all of their money.

Bitcoin Value Sinks Like a Stone

Famous for its extreme price volatility, Bitcoin’s value rose by more than 1000 percent throughout 2017, causing a huge stir in the crypto world and awakening interest from the public at large. But despite UBS Chairman and other industry experts warning about the risk, saying Bitcoin is “not an investment we would advise,” many have still jumped on board.

Facing further possible government bans around the world, or at least, some fairly heavy regulation, Bitcoin’s value has sunk like a stone since the start of this year, with the price collapse being described as a “bloodbath” and a “cryptopocalypse.”

The Market is Rife with Misinformation

The European Union’s Banking, Securities and Insurance Watchdog yesterday said that the cryptocurrency and ICO world is ripe with misinformation. They added that the advice given is “in most cases incomplete, difficult to understand, does not properly disclose the risks… and may therefore be misleading.”

“Virtual currencies such as Bitcoin, are subject to extreme price volatility and have shown clear signs of a pricing bubble, and consumers buying VCs should be aware that there is a high risk that they will lose a large amount, or even all, of the money invested,” the warning stated.

This warning comes out at the same time that an article in China’s Beijing News reported a rise in professional copywriters offering their services to write ICO whitepapers, which may include fabricated information.

Despite the domestic ban on ICOs in September of last year and the full ban on international cryptocurrency trading earlier this month, keyword searches using “blockchain,” “ICO,” and “white paper,” bring up numerous stores that offer white paper copywriting and fundraising consultancy services for ICOs.

White paper copywriting is sold for around $600 and may include false claims about the viability and credibility of a project.

A Magnet for Unlawful Behavior

This examination into cryptocurrency investing was requested by Valdis Dombrovskis, Vice-President of the European Commission, amidst concerns that digital currencies could be used as a “token for unlawful behavior.”  

With European governments now turning a serious eye to what’s going on in the crypto word, that may spell out bad news for Bitcoin. Just last week, France and Germany requested that cryptocurrency regulation be a topic of discussion at the next Group of 20 Economies (G20). They are anxious to assess the long term viability of cryptocurrency, looking beyond the current rollercoaster markets.

Too Little, Too Late?

If the warning is to be heeded and the cryptocurrency bubble will soon burst, the warning comes overdue for many unfortunate investors. Markus Ferber, Vice Chair of the European Parliament’s Economic Affairs Committee, pleaded for regulation, just as with any financial currency.

He said, ‘I expect the Commission to take the warnings by the three supervisory authorities seriously and issue a legislative proposal in this regard as soon as possible.”

But imposing regulation on these untamed markets will be challenging at best. Regulators will be looking to strike a healthy balance between allowing for market innovation and growth while protecting consumers and preventing money laundering and other criminal activity.

Bitcoin, Litecoin, Ripple and Ethereum are not issued by any central bank, neither are exchange rates regulated by EU law. That means that European investors won’t be covered by any type of national investment scheme insurance should the apocalypse come.

Things certainly don’t look good right now for crypto, with major players on the scene including the Wolf of Wall Street and Goldman Sachs claiming the Bitcoin bubble will be bigger than the dot-com era.

But then again, government bodies and financial institutions have been wrong about many an economic crash in the past. Perhaps this is just a sea change, rather than a tidal wave for digital money.

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Christina is a technology and business communicator who has worked with high profile ICOs and blockchain influencers to break industry news.

4 Comments

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    okay. I’m absolutely enjoying your blog and look forward to new updates.

The Bitcoin Bull Run: How It Started, How It’s Going Comments Off on The Bitcoin Bull Run: How It Started, How It’s Going 1032

Wherever you stand on Bitcoin, there is no question about its impact on the role of blockchain and cryptocurrency within society.  Whether we look back to Pizza Day or to its heights in 2018, the volatile nature of the cryptocurrency has garnered much speculation and media coverage. 

While many looked at the past few years as a “Crypto Winter,” others saw an opportunity for Bitcoin.  Between COVID lockdowns, political, and fiat currency concerns, Bitcoin has been on a dream run – for a moment going over the $55,000 barrier.

Why Did Bitcoin Suddenly Explode (Again)?

Elon Musk and other influencers played a role in the recent rise in Bitcoin’s price. Tesla’s recent investment in an infrastructure to accept Bitcoin payments, and Apple Pay’s introduction of BitPay, a prepaid bitcoin MasterCard, are also major markers of market adoption. But two other events occurred that set the stage for the Bitcoin bull run: a pandemic and Bitcoin Halving.

Every four years, Bitcoin miners have their processing transactions cut in half. This reduction in supply then drives up prices based on scarcity. This occured in May 2020, when the economy was already at a standstill due to the pandemic. Since the supply of crypto coins is finite many think that there is lower inflation risk with using them – this means that it may be used as a hedge against U.S. inflation. In 2020, more than 20% of all dollars currently in circulation were printed, making crypto even more alluring. 

Crypto isn’t going anywhere. This year, experts project increased use of crypto cards, emergence of new cases, and increased investing from traditional finance leaders.

Take a look at this visual deep dive on the rise of Bitcoin for more information:

Bitcoin: Once A Diamond In The Rough, Now A Treasure

Happy 10th Birthday, Bitcoin!! 7 3080

On January 3rd, 2009, block number zero produced the first 50 bitcoins. They were mined by none other than the mysterious Satoshi Nakamoto. Thus was born the phenomenon of the decade. And on January 8th, ten years ago today, bitcoin became a public network when Nakamoto released bitcoin version 0.1.

Nakamoto announced the release via the Metzdowd cryptography mailing list, calling bitcoin “a new electronic cash system that uses a peer-to-peer network to prevent double-spending.”

Nakamoto’s description of the software that would revolutionize technology is sparing and to the point. “It’s completely decentralized with no server or central authority,” the succinct announcement goes on. “Windows only for now.  Open source C++ code is included.” It describes the proof of work as “ridiculously easy”.

It follows with a brief description of how transactions work, how many coins will be released and how they can expect to split every 4 years, along with the caveats that the software was still “alpha and experimental,” offering “no guarantees”. It’s signed with no letter closing, simply:

“Satoshi Nakamoto”

Bitcoin, This Is Your Life

My what a ten years it has been. Just to recap:

On January 12th, 2009, programmer Hal Finney, who had downloaded the new bitcoin software immediately, received ten bitcoins from Nakamoto. This was the first ever bitcoin transaction. Over a year later in May 2010, programmer Laszlo Hanyecz received 10,000 bitcoins in exchange for two Papa John’s pizzas, initiating the first real-world bitcoin purchase and thereby creating the pizza index.

Bitcoin simmered until 2017, when it’s value jolted from $900 to over $19,000, and bitcoin became a household name. Over the past year, the original crypto has settled to a more modest $4,000 valuation, and stirred up a lot of public din in its wake.

Where Were You on January 9th, 2009?

So where were you on the day of Nakamoto’s announcement? Probably on your couch watching DVDs of Pineapple Express and It’s Always Sunny in Philadelphia seasons 1 through 3, or laughing at Dr. Horrible’s Singalong Blog on your iPhone 2.

It was a simpler time. Wired was calling Google Earth the number one app on the fancy new iPhone app store. Competition was fierce with Windows 7 in beta. Facebook had recently dropped the “is” from status updates, and a fun app called Twitter (formerly “Twttr”) had just introduced a feature called Trending Topics.

Trending Topics

David Bowie was celebrating one of his eight final birthdays, while Michael Jackson and Patrick Swayze were enjoying their last few months among us mortals. Only days later, pilots Chesley Sullenberger and Jeffrey Skiles made aviation history by skillfully crash landing US Airways Flight 1549 in the Hudson River, saving everyone on board.

A burgeoning class of ennui soaked fashionistas, deemed “hipsters,” were described in Time Magazine as “smug, full of contradictions and, ultimately, the dead end of Western civilization,” a vermin who “manage to attract a loathing unique in its intensity.” They went on with this colorful character sketch:

“Hipsters are the friends who sneer when you cop to liking Coldplay. They’re the people who wear t-shirts silk-screened with quotes from movies you’ve never heard of and the only ones in America who still think Pabst Blue Ribbon is a good beer. They sport cowboy hats and berets and think Kanye West stole their sunglasses. Everything about them is exactingly constructed to give off the vibe that they just don’t care.”

Time Magazine, 2009

Is it time for any of that to come back into style yet? Maybe give it a few more years. We need a break.

Williamsburg was gentrifying and Portland was still America’s best kept secret. The streets were flooded with fixed gear bikes and the sounds of Grizzly Bear, Real Estate, Kings of Convenience, and TV on the Radio.

Animal Collective’s Merriweather Post Pavilion was just a few days old, and Fever Ray’s self titled was about to drop. The world was listening to Lady Gaga, whose single “Just Dance” hit number one on Billboard’s top 100, and Taylor Swift’s Fearless, which was the top selling album.

That same month, box offices favored the cuddly Marley & Me, while The Dark Knight swept the people’s choice awards. Audiences were still getting wowed by Avatar, paying a lot to be disappointed by Mall Cop, and getting hyped about the upcoming Watchmen movie.

Meanwhile in Washington DC, a president with a multisyllabic vocabulary was about to be inaugurated (a rarity in the 21st century, we would find out), and his kids were playing with a Wii they got for Christmas.

Here’s To Another Decade Ahead

What a time it was, the dawn of 2009. And most of us, at least for a few more years, had never heard about blockchain, cryptocurrencies, or bitcoin.

And now here we are.

So, dear reader, here’s to ten more years of crashes, booms, bubble scares, hype, derision, libertarian fanboys, pizza and moon lambos. Happy tenth birthday, bitcoin!!1

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