Crypto: The future of money or the biggest scam?
New Delhi (CNN Business)Cryptocurrencies have had a dismal start to the year, and continue to plunge as major economies around the world look to curb their growing popularity.
Bitcoin has fallen over 7% in the last 24 hours, and was trading at $39,097 as of 3:00 am ET, according to CoinDesk. The world’s most valuable cryptocurrency has plummeted over 15% since the beginning of the year. In November it was trading at a record high of $68,990.
Its peers have fared worse recently. Ethereum, which is the world’s second most valuable cryptocurency, fell almost 8% in the last 24 hours, and is now trading at around $2,895, according to CoinDesk. It is down almost 20% since the start of January.
Investors have been getting jittery about digital currencies and other riskier assets ever since the US Federal Reserve signaled it may unwind economic stimulus more aggressively than expected.
Governments are cracking down as well. On Thursday, Reuters reported that Russia’s central bank has proposed a ban on crypto use and mining. Russia is one of the biggest crypto-mining nations in the world, but its central bank said that digital currencies can pose a threat to the country’s financial stability.
The Russian proposal comes just a few months after China launched a full-scale clampdown on cryptocurrency, banning both trading and mining.
Other countries are also flirting with a ban on crypto. In November, India said it was preparing to introduce a bill that would regulate digital currencies, although much is still unknown about that proposal. Earlier this week, India’s prime minister Narendra Modi said that global cooperation is needed to tackle problems posed by crytocurrencies.
However, not everyone is pessimistic. Goldman Sachs said that the price of bitcoin could reach more than $100,000 within the next five years. In a report published earlier this month, the bank’s analysts said they saw strong gains ahead because bitcoin would increasingly steal market share from gold.
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