How the Crash on Bitcoin is Affecting Other Markets

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The largest banks in America have recently stated a change in their policies to help ensure that customers will not be vastly affected by using credit cards to purchase cryptocurrency. The statement comes at a time when as much as 15% of bitcoin is being purchased with debt-producing assets such as credit cards. According to the report “JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. started to decline purchases as industry executives zeroed in on a variety of ways they could get burned, according to people briefed on the decisions.

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Publicly, JPMorgan cited the risk that borrowers might not repay. Behind the scenes, card issuers were also concerned about the protections they offer shoppers and their vulnerability to thieves.” With many new cryptocurrency based start ups offering initial coin offerings to their investors, it is clear that there needs to be some sort of regulation to continue the markets flow in the future. With initial coin offerings drawing in over $3.7 billion last year in funding, it seems like the cryptocurrency industry is finally being taken seriously.

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For those who don’t know, an initial coin offering or ICO is essentially he same as an IPO except instead of offering stocks, the company offers coins which can be held on to for investment sake, or traded for another form of currency. These ICOs have been notoriously fraudulent, and the actions of a few companies have resulted in the broader market not recognizing this as a viable way to raise capital. Many of these banks have continued to state their pledges to ensure that individuals will be protected from the often fraudulent nature of cryptocurrency related ventures. The hopes are high that new regulation will ensure that individuals and their investments are safe.


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