The cryptocurrency enthusiasts are facing a setback because the value of Ethereum, Ripple, and Litecoin have dropped to meager 50% when compared to its value, last year. This is because of the scams that came to light that slashed down the price of cryptocurrencies, significantly. Apart from many scandals that are leveled against these alternate coins, the emergence of stringent laws is also a major reason for the major slump in the value of these digital currencies. This way, the respective governments expect to find a temporary mooring failing which would otherwise lead to a disaster in the near future.
Another reason why cryptocurrency is considered dreadful is the unscrupulous activities that can seep into the economy as these transactions can be made without revealing the true identity of a person or a company. The Bitcoin value has come down three times remarkably from 2011 to 2017. So many investors are selling their cryptocurrencies to avoid getting burned in the coin market.
It is known fact that investing in digital currencies is highly risky. But, they are not bad either. One has to do a thorough research and be aware of the risks before deciding to trade in cryptocurrencies. While understanding the do’s and Don’ts, the trader has to know the e-currency scam that led to the decline in the value of these digital currencies. A lot of cryptocurrency exchanges have vanished overnight with investors’ money. MT.Gox, one of the famous exchange paused all trading activities during February 2014, all of a sudden. It was later found out that this exchange has amassed the investment of the traders amounting to 8,50,000 dollars.
Similarly, Bitflix, a bitcoin exchange identified some dubious activities going on in its exchange. It also reported that some traders are involved in market manipulation activities. These fraudulent traders increase the price by buying a lot of coins just to increase the demand for the bitcoins. There may be even many other instances happening because of the lack of a common regulatory authority to control this market. This is the major reason for the deflation in the price for these digital currencies. Yet, there is a room for a better future of cryptocurrency if strict laws are made to regulate this coin market.
Recently, China and North Korea have brought strict rules banning the cryptocurrency trade that has disappointed digital currency fans in these countries. This almost made the trading impossible. The traders can still carry on buying and selling these alternate currencies in over-the- trade counters. This has, to some extent, brought about a check the dubious activities of the unfettered speculators.
In short, cryptocurrency is a new breed of financial activity that makes use of cryptography to secure every transaction involved in the purchase and sale of digital assets. Trading in these can’t be considered as a bad activity altogether. Only some countries have decided to put a ban on the trading of e- currencies. Some are waiting to run a protocol to assess the extent of risk involved in such a trade. Some others, like the US, have wholeheartedly welcomed this kind of virtual currency that led to the incredible increase in its value, recently.