The trading of cryptocurrency including Bitcoin and Ethereum may be clamped down on by The European Securities and Markets Authority (Esma) in the interest of safeguarding amateur investors.
Regulations have been emplaced in other parts of the world to limit the ability to trade digital currencies, actions that threaten to hamper their booming growth.
Contracts for difference (CfD) are at the centre of the watchdog’s concerns, expressing awareness that many are losing excessive amounts of money by investing in them. These contracts allow trading to be done without owning the asset involved.
Proving the intentions of the EU watchdog, it announced that proposals for cryptocurrency regulation have already been considered and they are being looked into. This move could provide a new set of rules regarding the trading of cryptocurrencies.
Cryptocurrency and Bitcoin in particular has received a full spectrum of reaction, many are highly sceptical while other remain staunch promoters, arguing that digital currency has an integral place in the future in many areas. John McAfee is a prime example of a high-profile individual championing the progress of currencies, regularly endorsing emerging examples.
In stark contrast to this, the famous investor, Warren Buffet, recently entered the arena of opinion with the belief that Bitcoin was heading towards a bad ending. The billionaire expressed this opinion when stating that he would not be investing digital currencies, adding that he was speaking with ‘almost certainty’.
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Countries including China, Russia, South Korea and Vietnam have taken action to limit cryptocurrency activity, in some cases banning it entirely. These decisions have negatively affected the booming value of Bitcoin and other digital currencies, suggesting that action from the EU markets watchdog would also deliver a blow to the ailing bitcoin value.
After spending practically all of 2017 breaking new value records, bitcoin recently dipped below $10,000 per coin, having come close to breaking through the $20,000 mark towards the end of last year. Although difficult to be certain, there is speculation that anticipated of regulators clamping down on cryptocurrencies is driving this fall in price.