The past few days has seen the value of Bitcoin take a nice stroll to levels above $8,000 once again, reaching a high of $8,400 on Monday. However in the past few hours it has plunged once again below $8,000 down to a low of $7865, this rapid plunge appeared to occur on news of a statement from the City of New York.
New York Attorney General Eric Schneiderman’s has written a letter to 13 exchanges requesting that the companies provide information on a range of topics related to the operation of their trading platforms:
“Representing a technological advance, a medium of exchange, and an investment opportunity all at once, virtual currencies are inspiring innovators, entrepreneurs, and investors—and are fueling an increasingly diverse ecosystem of companies and applications……. But virtual currency is also a highly speculative sector, featuring significant volatility, instability, and risk. Moreover, published reports indicate the sector has attracted fraudsters, market manipulators, and thieves.”
The exchanges in question are the following GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Kraken, Bittrex, Poloniex, Binance, Tidex, Gate.io, itBit Trust Company, and Huobi.Pro. Each letter included a questionnaire which must be completed by May 1st 2018 and probes into the exchanges KYC and AML procedures.
Though Bitcoin may of taken a small tumble from the news it is not really a worrying development, New York has one of the most comprehensive regulatory frameworks for Cryptocurrency in the World and this latest action is merely reinforcing this framework.
We would expect Bitcoin to recover from this loss over the coming hours, though it should be noted that the bear market was never officially over – until we see the value above $10,000 all bets are off.