The cryptocurrency market is still reeling from the terrible scam that has left even those that didn’t fall for it counting the cost. Bitcoin has had a strange 2019, starting out the year with a fairly low value and generally recovering from the fallout of the 2017 Christmas crash. Then, unexpectedly, it started to rise and gain a lot of traction very quickly.
Bitcoin Value Fluctuation
This took the whole community by surprise, with even seasoned professionals a bit perplexed by the sudden and dramatic turn around. The currency seemed to be inflating in value at much the same rate as it had before it crashed so emphatically in 2017. The consensus was that Bitcoin was rallying because of its resilience and because ultimately, the technology held a high value.
Then, faster than you could say the words Bitcoin scam, people were buying up Bitcoin like it was about to be rationed. The value leapt more and then something terrible happened. Something that even now, crypto commentators are still confused about and trying to fit back together.
The Bitcoin price dropped massively.
PlusToken Scam
All of this a result of a Chinese investment consortium called PlusToken. They had promised their investors huge returns on their investment and used the Bitcoin name (alongside Ethereum and EOS) to make sure investor confidence was high. Then they pumped all of that investment money into Bitcoin, Ethereum and EOS and artificially pushed the price up.
Instead of paying the returns they promised (and even being able to manipulate the price in the way that they did, they couldn’t have inflated to the amount the promised), they cashed out in one go, creating a huge hole in the crypto market and disappeared. So far, all we really know is that Chinese authorities have tracked down some of the computer equipment and from checking that they estimate the scam to be worth around $3 billion.
Does Crytpo Need Some Basic Regulation?
This Bitcoin scam comes at a really bad time for cryptocurrency developers and businesses because it has once again shown how vulnerable the market is to manipulation. With more and more serious investors seeing cryptocurrency as a viable investment opportunity, it is only a matter of time before the rallied calls for regulation are heard. Tough regulation may be exactly the medicine for the scams that everyday traders are facing, but it could also add a level of bureaucracy that hinders crypto developers.
What do you think? Is now the time to clean up the crypto market once and for all or can it survive as it is?
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