After witnessing massive success in the last quarter of 2017, Bitcoin is now declining rapidly, as it dropped to its lowest in over two months.
The digital currency fell to a low of $5,947.40, its lowest since mid-November, according to CoinDesk, whose bitcoin price index tracks prices from four major exchanges. With that decline, bitcoin has now lost more than 50 percent for the year so far.
On Friday, J.P. Morgan Chase, Bank of America, and Citigroup announced their decisions to ban cryptocurrency purchases by their credit card customers, owing to the uncertainty and risks involved.
JPMorgan announced the ban with effect from Saturday. Company spokeswoman Mary Jane Rogers said that the bank didn’t want the credit risk associated with the transactions.
Bank of America started declining credit card transactions with known crypto exchanges on Friday. The policy applies to all personal and business credit cards, according to a memo. It doesn’t affect debit cards, said company spokeswoman Betty Riess.
On Friday, Citigroup said it will also halt purchases of cryptocurrencies on its credit cards. “We will continue to review our policy as this market evolves,” company spokeswoman Jennifer Bombardier said.
Digital currencies have been operating in a regulatory vacuum since bitcoin’s debut in 2009.
Regulators, however, recently started paying closer attention and warning investors about potential scams. The Securities and Exchange Commission created a Cyber Unit to go after such suspected fraudsters.
Garrick Hileman, a cryptocurrency researcher at the University of Cambridge, said some big banks also recently pushed back on digital currencies, which are not issued by any government, unlike traditional currencies. “The recent spate of bad news continues for cryptocurrencies, with several important banks announcing a ban on the purchase of cryptocurrencies with credit cards,” he said.
In Asia, where cryptocurrency is particularly popular, China and South Korea have both cracked down on cryptocurrency trading. Concerns about new restrictions, and rumors over a potential ban in India, have fueled volatility in crypto prices.