Bitcoin price continued to remain below the $35,000-mark even on Wednesday. The world’s largest cryptocurrency has seen a drastic drop in its value and overall market price in the last few weeks. Bitcoin price has slumped to $34,650.37 on June 30 on coinmarketcap.com Index following a roller-coaster week of trading. The sell-off in the cryptocurrency world will continue, analysts predicted. According to analysts from JPMorgan, Bitcoin could result in the further selling of spot BTC, which in turn will drive the market cap price of this coin to a record-low value of $25,000.
The drop in value can be attributed to a number of factors, one of which is related to Tweets made by Tesla CEO Elon Musk, which caused a massive dip in the market value of the digital currency. On the other hand, increasingly stringent laws and regulations across the world have resulted in big crypto exchanges like Binance amongst others to have faced a severe crackdown.
These changes come in light of the fact that governments and regulatory authorities worldwide are attempting to secure the mechanism of these digital assets within the industry. In the wake of the rising popularity of cryptocurrencies like Bitcoin, investors both private and commercial are looking to sink their teeth into the game. The caveat here is that this mode of transaction is incredibly unstable and volatile for the everyday user or pre-established financial institutions.
Inversely, regulators and governments do recognise the potential of cryptocurrencies and the benefits it brings to the table in the form of low– to no cost transactions, 24×7 trading possibilities and limitless capacity to purchase with no withdrawal ceiling. Having said that, regulatory bodies and governments of countries like China, Australia and Britain have sought to crack down on the crypto trading agencies as well as attempt to regulate industry trading and in some cases put an end to the mining operations.
China’s Stance on Cryptocurrency and Bitcoin
Though China has not put an outright ban on cryptocurrencies ownership on the individual level, the new and stringent approach to commercial crypto has severely affected the over-the-counter adoption of the digital currency. BTC China (BTCC), one of the largest and first-ever Bitcoin exchanges in China has confirmed the closure of its trading operations. China has effectively asked institutions including banks, online payment gateways and other financial institutions to curb any services involving cryptocurrency. The country will also be taking measures to stop crypto mining which has led to crypto miners such as HashCow and BTC.TOP to stop their China-based operations.
Australia, while also not outright banning crypto, is seeking proposals from market participants to identify the best approach to making use of crypto assets and make sure good market practices are in place going forward. The proposals will consider these assets as financial instruments that fall under the purview of the Australian corporations law, which means that these changes and regulations will come under the purview of the Australian Securities and Investments Commission (ASIC).
The United Kingdom took a strong stance against cryptocurrencies and has banned big-time crypto exchange Binance from operating in the country. Due to not meeting the anti-money laundering requirements in the country, Binance withdrew its Financial Conduct Authority (FCA) application.
India’s Stance: Taking its Own Path
For India, at present, there is no fixed regulatory framework in place for the use or trade of cryptocurrency. While the government debates on the legalities and whether or not to allow it, the Reserve Bank of India (RBI) has made it clear that its previous mandate against cryptocurrencies in 2018 cannot be cited by banks and in fact, it was set aside by the Supreme Court on March 4, 2020.
This gives a moment of respite to crypto traders and investors in India. It appears more and more that the stance towards cryptocurrency is softening in India, with RBI cautioning banks and financial institutions to carry out due diligence and make sure that these transactions simply fall within the regulatory standards of Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002.