Bitcoin 'to fall to $5k' as banks ban card payments, China issues ban
Britain’s biggest bank has banned its customers from investing in cryptocurrencies with its credit cards, following moves from US banks last week, while China is planning to step up its regulation of the area.
The cryptocurrency has plummeted by more than 57% in just two months, falling below $8,000 on Friday after topping $19,500 in December as a US regulatory investigation reared its head.
Bitcoin plunged 10.5% to just over $7,500 following the People’s Bank of China stating it would step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs, "to prevent financial risks".
Last week the US Commodity Futures Trading Commission was investigating the cryptocurrency’s wild ride to almost $20,000 at the end 2017 rise for signs of market manipulation.
Worried that it might end up having to pay the bill for unpaid debt if the price of bitcoin keeps falling, Lloyds on Monday banned customers from paying for the digital currency using credit cards issued by its Halifax, Bank of Scotland and MBNA arms.
Lloyds' crackdown follows similar moves by many US banks, including the two biggest, JP Morgan Chase and Bank of America, both stating on Friday that they were stopping purchases of bitcoin and other cryptocurrencies on their credit cards.
Governments across the globe continue to clamp down on retail investors speculating on cryptocurrencies, said Miles Eakers, market analyst at Centtrip.
“The announcement pushed Bitcoin down even further, and it’s now trading at $7,530. We envisage this decline will continue, setting the next technical level at $5,000 a coin,” Eakers said.
Connor Campbell at Spreadex said on the cryptocurrency’s situation, “Bitcoin started this week as it ended the last, battered and bruised following some more bad news for the payment system. With Lloyds Bank banning the purchase of the product on its credit cards the cryptocurrency shed another 9% after the bell, taking bBitcoin below $7850 per coin.”
Bitcoin's price has come crashing back down amid the threat of regulations from the governments in the US, South Korea, China, Russia and India, as well as corporate bans from Facebook, which has banned adverts for cryptocurrencies due to scams and hoaxes being promoted on the site, and now Lloyds.
British Prime Minister Theresa May has said that cryptocurrencies should be carefully watched because they are very popular amongst criminals to finance their illegal activities.
The uncertainty surrounding bitcoin is leading investors to put their money in more reliable assets like gold.