According to the bloc’s top banking regulator European Banks must shun virtual currencies until regulations fall in place. The European Banking Authority is developing safeguards for trading platforms in order to stop groups that would oversee each itnernet currency and ensure that no individuals are manipulating “the integrity of a particular currency scheme and its key components” according to a statement today. Until those groups are established and the proper regulation fall into place, EU authorities are advising that banks should not buy, hold, or sell virtual currencies.
As we saw int he past, cryptocurrencies have been linked with fraud and scams. If banks invest in cryptocurrencies and then a scam like MtGox happens the banks will end up taking a net loss which will affect it’s consumers. That is why the EBA is taking extra precautions to make sure that banks do not loose money through such scams or frauds. While it is a good idea to stay cautious the fact that the EBA is telling banks not to have anything to do with cryptocurrencies is discouraging. There is a large gap between the banking/ financial industry and technology. When the world is caught up on bitcoin and understands the proper ways to store, buy, and sell the coins that is when global adoption will come and we will see the true rise of bitcoins, but until then we have to jump through major hurdles of regulation, merchant adoption, and consumer understanding.
So the reason we are experiencing this dump is because the EBA released the warning to banks. As a result, any banks who were holding bitcoin are in the process of dumping it, and since the news just came out the dump is NOT over.
Let us take a quick look at the market of BTC-E:
As we know, the news from the EBA came about 3 hours ago which is right when the dump started. You can see the increase in volume which indicates the EU banks are dumping their coins.
As a disclaimer the below will be pure speculation and we are not responsible for any of your lost coins. EU was never a major player in the bitcoin industry, it was mostly China and the US that cause large swings in the bitcoin price, thus, we might not even go under $620. The bearish market has been slow and no huge dumps have been seen lately, so this might be just another small dump and bitcoin prices will stabilize after a couple days.
In the meantime do not forget to follow us on twitter @btc_feed for the latest bitcoin market predictions, news, and alerts when dumps are happening. This way you will never loose money because you missed a dump, and you will never sleep through profits when pumps are underway.
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