Cryptocurrencies are in a broad freefall as roughly $130 billion in market cap has been lost overnight.
At the time of publication, Bitcoin has crashed through the key level of $9000 and has also tested sub $8000 levels.
Essentially all of the December 2017 gains have been retraced in all top 10 cryptocurrencies with the exception of Ethereum.
Bitcoin has fallen by more than 56 percent since the turn of the year, after peaking at nearly $20,000 in December 2017.CoinMarketCap price charts show that bitcoin has been falling for weeks, though this latest crash has been blamed on mounting confusion surrounding the Indian Government’s stance on cryptocurrencies.Yesterday, the Finance Minister Arun Jaitley spooked investors when he announced plans to “eliminate” the use of digital currencies for payment purposes.He said: “The Government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.
“The Government will explore use of blockchain technology proactively for ushering in digital economy.”
Ajeet Khurana, head of the Blockchain and Cryptocurrency Committee of India (BACC), has clarified the situation somewhat, arguing that cryptocurrencies are just not part of the “payment system”.In an interview with Your Story, he said: “The payments system includes a lot of things like the settlement mechanism, and the banking system. In recent times, digital wallets and other payment mechanisms have been added to the entire scenario.“What the Finance Minister might be saying is that cryptocurrency is not considered to be a part of these payment systems.“Similarly, gold is not part of a payment system, but people still barter assets like gold for goods, as long as both parties record the transaction. It is an asset barter transaction.
“There is a little subjectivity on the matter. Can an individual swap cryptocurrency for another cryptocurrency?
“We have to wait for clarification on what the Finance Minister meant when he mentioned payment system.”