The google search result for the most searched celebrity on the internet for 2017 will not show the name of any human celebrity, but cryptocurrency. The boom of the virtual currency market has transformed the way in which the world has been making money. Cryptocurrency piqued interest majorly due to exponential rise of bitcoin value. It became the most prominent currency in the world with its value rising from $1,000 to $20,000 in mid-December before experiencing the biggest downfall of the year. Ethereum was the second most prominent cryptocurrency. But recently Ripple took over to become the second most valued digital currency. These digital currencies have not been backed by the government. The prominence across the world raised a question if governments would regulate them.
Many major exchange boards such as Chicago Mercantile Exchange (CME) began bitcoin futures trading. However, no government has shown interest in regulating or backing them. Governments or justice ministries of some countries such as South Korea have proposed ban on cryptocurrencies due to difficulty in stopping tax evasion. In the past week, police and tax authorities raided couple of biggest cryptocurrency exchanges in the South Korea under the allegations of tax evasion. In addition, justice ministry of the country warned that it has fastened its seatbelt to ban cryptocurrency in trading. These unexpected raids affected the global cryptocurrency market. The value of bitcoin slumped considerably major exchanges across the world. Investors could only wish that its plan to ban will never become a law.
Israel authorities have proposed a regulation to ban companies from trading cryptocurrencies in its the Tel Aviv Stock Exchange. Shmuel Hauser, the chairman of the Israel Securities Authority (ISA) presented a proposal to the board in early January. He outlined the need to regulate companies trading in digital currencies. It is obvious that few companies will be affected due to potential ban.
In the U.S., many companies joined forces to introduce bitcoin exchange-traded funds (ETF) into the market. However, US Securities and Exchanges Commission (SEC) raised some concerns and they had to hold their plans for some time. According to a firm participated in the team of companies with proposal, SEC outlined concerns regarding the “liquidity and valuation” of bitcoin futures contracts. Some analysts have predicted that the race to introduce bitcoin ETF would gain traction in the future despite various concerns and obstacles as people have been enthusiastic about bitcoin.
There have been mixed responses about cryptocurrencies by experts and tech giants. Bitcoin has been the center of their opinions about cryptocurrency. Some expert believe that bitcoin is fraud, while some opine that it is a bubble which will burst sooner or later. However, some outlined that its value will reach up to record highs. Michael Novogratz, Former Fortress Hedge Fund Manager, outlined that the value would reach $40,000 by the end of 2018.
However, government may or may not take opinions of experts into consideration to decide whether to regulate or ban the cryptocurrency. On the other hand, there are cryptocurrencies which are easy to exploit, but there is uncertainty. Moreover, probability of government creating its own cryptocurrency cannot be ignored.