According to an article in Forbes today, bitcoin resistance is being encountered via serious systemic headwinds in its fight to regain its momentum and price peak. After hitting nearly $20,000 in late December it has taken a long ride back down. The reasons are numerous:
- China continues to slowly make life more and more difficult for cryptocurrency buyers, sellers and traders. Last year they greatly restricted activity on the mainland by shutting down cryptocurrency exchanges, but citizens were able to get around that by using overseas exchanges. Now the Chinese government is going those local buyers on foreign markets by blocking all access. China is also blocking all advertising of cryptocurrencies as well as deleting them from search engine results and social media.
- India too is enacting more and more restrictions and is considering a total ban on trading to be decided in the next few months.
- More and more banks are turning off usage of their credit cards to make cryptocurrency purchases. Some big names to take this action have been Discover, Citigroup, JPMorgan Chase and Bank of America. The ease of use of credit cards made buying cryptocurrencies fast and easy. Without this common and painless method bitcoin resistance will increase and may see a big drop in purchase volume – and fewer purchases will probably put even more drag on the value of bitcoin. In addition to restricting usage of their credit cards, banks are also generally opposed to bitcoin since it does not support their financial model.
- Some major eCommerce players like Microsoft and payment provider Stripe are also closing up their bitcoin shops, due to the volatile nature of bitcoin.
All in all, as the environment to purchase and use bitcoin gets more and more difficult, bitcoin resistance will increase even further. This will cause the value of bitcoin to continue to sink. The value of bitcoin has no inherent value and is purely driven by supply and demand so less demand will mean lower prices. If it is hard to buy it and hard to spend it then most people will ask themselves if they really want to bother with it at all. Will Ship Bitcoin get through this storm?
