Bitcoin Crash News
I noticed in the news yesterday that Bitcoin has dropped in value slightly so that has me asking myself the question if bitcoin has reached it’s summit?
Time will tell but the news that Virgin Money is the latest company to ban it’s customers from buying Bitcoin with their credit cards and also any other type of Crypto currencies cannot be good news or be a catalyst for a recovery as they now join another major banking group; Lloyd’s Banking Group had issued the same ban previously.
Virgin Money representatives confirmed with BBC News that
“Following a review of our policies, I can confirm customers will no longer be able to use their Virgin Money credit card to purchase crypto currencies.”
The ban will effect credit card holders but not debit card holders in this situation.
The value of Bitcoin fell a further 10.86% to $7,297.65 on Monday 5th February which has raised concerns in Lloyd’s and Virgin Money that customers could get caught up in a gold rush type scenario and run up large debts as there has been a sharp fall in the value the crypto currency.
BBC News goes on to report that it is not just in the UK that concerns are mounting over credit card debt rising as the price falls as the same rumblings are being heard in America Also. The weekend just gone saw some of the biggest credit card companies in the USA also issuing Credit card bans to their customers to buy crypto currencies and they included names such as Bank of America, Citigroup, JP Morgan, Capital One and Discover.
The Lloyds’ banking group have applied this ban to all 8 million customers which stretch across it’s customer base in Lloyd’s Bank, Bank of Scotland, Halifax and MBNA. The ban started on Monday 5th February however no warning of the block is being sent out to it’s customers! They will only discover it when they try to buy crypto currency and ring to find out why it’s been blocked!
I think there maybe a few disgruntled customers this week!!
You can research Bitcoin more through BBC news if you want to know more about it.
Lloyd’s Banking group gave a brief explanation to BBC News explaining their actions:
“We continually review our products and procedures and this is part of that.”
The banking trade organisation, UK Finance has confirmed that it has not released any guidance on the matter as of yet.
Gillian Guy, the chief executive of Citizens Advice, welcomed the announcement by Lloyd’s and told BBC news:
“It shows they recognize the risks of credit card customers running up debt they can’t afford,”
Although Bitcoin ended the previous week down by 30% at $8,291.87 which was it’s worst performing week since April 2013 and much lower than the $19,000 it reached in November 2017, It is in fact still ahead of the $1000 it was trading at in February 2017 so all is not lost!
Police have issued another warning this week to remind people that crypto currencies remain popular among cyber criminals as they can use them to evade traditional money laundering checks and other regulations on a global scale rather than country to country and it is also known that the Chinese government is aiming to increase the legislation to prevent would be investors in China from accessing overseas exchanges to trade in crypto-currencies. So it remains how crypto currencies will fair in the future. It is early days but governments need to protect people from the criminals and find a solution as crypto currencies are here to stay I feel.
The UK Prime Minister Theresa May recently confirmed the way things are moving by stating action maybe required due to the way Criminals use them.
The Prime Minister went on to explain to Bloomberg’s that;
“In areas like crypto currencies, like Bitcoin, we should be looking at these very seriously.”
The UK Treasury is thinking along the same lines as the Chinese but on security measures and is intending to update its regulations and bring the many virtual currency platforms into anti-money laundering and counter-terrorist financing regulation and other counrties are following with restrictions.
Facebook have also announced that they will now block advertising that specifically promotes crypto currency and the services they provide. Anybody can advertise at the moment and promote virtual platforms but if you dig deep and do your research you will see that a lot of them are very suspicious to say the least and are not regulated by any financial authority.
Take Questra for example, this is an investment company with a Madrid office although simple research will show you that this Madrid office is infact an apartment you can rent on Airbnb!! check out my review on them: Questra you will see that this firm is not a role model for professionalism as a lot aren’t and that is what is spoiling for the legitimate companies out there.
Brian Milligan, a personal finance reporter explains in the BBC News article
“that the decision undertaken by Lloyd’s Banking Group in banning the purchase of Bitcoin with it’s Credit cards has set in motion a new precedent for banking ”
Up to this point only two things were banned from being paid by the use of credit cards and those were: paying off debt – for example you could not use your credit card to pay a mortgage payment or anything else that is deemed illegal however you will probably find it rare to see a stockbroker accept a payment for shares by using a credit card either but that is a decision the stockbrokers have as company policy rather than banks prohibiting it.
but you are ably to use your credit card to gamble!! That OK though as the credit card companies will treat this as a cash loan, so the can charge 30% a year interest plus any other additional fees on top just in case you happen to win then that way you will still end up losing!
Lloyd’s has taken a decision though that Bitcoin and all the other crypto currencies out there are represent a risk than gambling. At least they are being responsible as they could of left it and we may of seen another credit crunch when it all goes wrong.
When you are using a credit card you are using credit belonging to the bank so if you can not repay this credit then it’s the bank that has to foot the bill. I tend to agree with them to be honest and I would love to find out what you think about the banks decision.