Tuesday was another tough day across the cryptocurrency market thanks to a number of different announcements that were made. Bitcoin itself tumbled below $10,000 for the second time to start the month off. Litecoin is also down below $175 and about to fall out of the Top 10 on coinmarketcap.com if price continues to go down.
A lot of people have asked me throughout the day why their cryptocurrency is falling so low after the pump the market saw over the weekend. There are a number of things that are keeping the cryptocurrency market low right now.
Supposedly the main reason for the pullback is all the FUD surrounding Tether Coin and the exchange, Bitfinex.
That fud turned out to be nothing other than old news being recycled about Tether and Bitfinex receiving a subpoena from the United States Futures Trading Commission. The subpoena was actually sent to the companies on December 6. For some reason mainstream news just now got a hold of the information and decided to make it bigger news than what it really is.
It will be interesting though to see if Tether and Bitfinex actually produce the cash that they are supposed to have in reserve backing the coin. Tether is supposed to be a coin that holds around the same value as the US dollar does. If things do turn out that Tether does not have the currency they say they do we could see another loss of faith in cryptocurrency by newer investors.
Although this is some interesting news about Tether it's still not why the market is in the shape it's in.
More news that came out on Tuesday was that Facebook was banning all cryptocurrency advertisement. This is kind of surprising since Mark Zuckerberg was discussing last week about integrating some sort of crypto to the Facebook platform.
A lot of the crypto promoters use Facebook to promote their most current ICO's and lending platforms they are involved in as well as sponsored advertisements people pay for. Facebook is giving up a lot of revenue by banning ads that involve cryptocurrency.
This could have a lot to do with the Bitconnect lawsuit. All the top promoters that are being sued were using YouTube to promote Bitconnect. Since there are a lot of sketchy ads on Facebook this could be the companies way around dealing with the lawsuit that YouTube is now entangled in.
Not really sure if this is a smart business decision by Facebook but this ban actually helps the crypto world. It will trim the fat of uneducated buyers that are clogging up the systems and trying to get the government involved when they sustain losses.
Besides since the announcement was made there have been a number of ads hit the timeline. A lot of good announcing that ban has done so far.
Even though the Facebook news is a pretty big thing it's still not what has the market hovering where it's at.
What has the market low right now are the number of credit card companies that no longer let people buy crypto with their cards.
This could be what is really hurting the market right now. There is not very much new money going into the market because a lot of people were using credit cards to purchase Bitcoin with. Now that certain credit cards are no longer accepted people are being forced to make more educated decisions on spending.
Capital One, Bank of America and Citigroup all stated they would not allow cryptocurrency to be bought with their credit cards any longer. Surprisingly J.P. Morgan is not one of the banks to rule against cryptocurrency despite the stand Jamie Dimon has taken against Bitcoin.
It is also hurting that Coinbase too PayPal out of their options to withdraw your money. That was one of the top features that people were using to recoup their USD. Now Coinbase wants people to use bank accounts to transfer money. That's fine other than the fact they do not take all banks routing numbers when you try to sign up.
The Bitconnect situation also has a number of people backing away from cryptocurrency right now. A bunch of people turn to YouTube to get their crypto knowledge. When you get on YouTube and these marketers pop up as scammers when you search Bitcoin is not a good thing. People start watching the horror story videos. After that it's pretty much over for people that already question Bitcoin and the other alt coins out there.
These are the situations that I really think are affecting the market right now. The best thing to do is sit on all currency right now and ride this red wave out. These are usually the times people make poor decisions to avoid losing so much. Don't be that person. The market will recover if you just give it some time.