After Bitcoin’s price peaked in December, reaching US$20,000, the cryptocurrency has been losing its value. In the first month and a half of 2018, the digital currency has lost half of its value, moving from US$13,800 to US$6,860.
Analysts identify the regulatory clampdown, moves by banks to ban bitcoin purchasing with credit cards, and Facebook's prohibition on bitcoin advertising as potential drivers of the currency’s loss of trade value. A trend shared with other digital currency.
On Sept. 2017, the Chinese government banned Initial Coin Offerings (ICO), a cryptocurrency-based crowdfunding mechanism, and later extended a prohibition on the local exchange of digital currency.
This year, South Korea imposed strict regulations on cryptocurrency speculation, specifically tackling anonymity and money laundering. The move is seen as positive by some cryptocurrency backers. Julian Hosp, co-founder of TenX told CNBC "If, afterwards, investors and companies have more legal security working in the ecosystem, it's going to have some short-term downsides, but long term, it's going to have a really, really big boost."
In February, Indian finance minister Arun Jaitley stated the country does not recognize bitcoin as a legal tender. Shortly after, the secretary of economic affairs announced that they were setting up a panel to examine trading of crypto assets in unregulated exchanges, which is expected to submit their findings in March.
Meanwhile, banks in the United States like JP Morgan Chase and Citibank have banned customers from buying cryptocurrency using their credit cards. A move also adopted by the British bank Lloyd’s.