Peruvian Central Bank Warns Of Bitcoin And Crypto Market Volatility Risks
One of the advantages of the cryptocurrency marketplace is that it simply does not follow the trends of the regular stock market. It moves with the popularity of social media and other factors, and the various changes to regulatory measures can impact specific areas without moving the market as a whole. Still, it is a volatile place, which is something that Peru’s central bank recently took to warn their consumers about.
In a Twitter post on Friday, the bank linked an image from Bloomberg, showing the drastic changes in Bitcoin prices from December last year to now.
Along with the image, they commented,
“Cryptocurrencies are not supported by central banks and pose risks due to the high volatility in their price, fraud cases and their possible use in illicit activities. Bitcoin’s price fell 56% as of October 2018 and has lost an additional 13% percent in November.”
Right now, Peru is not interested in working on cryptocurrency regulation in their country, based on a report from crypto outlet Criptonoticias. However, blockchain technology has been on their mind for a while, since the Superintendency of Banking and Insurance (SBS) became a part of the R3 group in September last year. Their joining was an effort to support research on this budding technology, examining how it can be integrated into Peru’s economy.
Throughout the year, participants in cryptocurrency trading have expanded. In fact, based on data offered by Coin Dance from LocalBitcoins, the average amount trade in Peru by the week in January 2018 was about 17 BTC. By the end of September, that amount had risen to nearly 150 BTC a week, which is almost a nine-fold increase.
However, since Wednesday last week, there has been a major drop in the market. Bitcoin has reached a price tag of less than $5,000 for the first time this year, which has caused other cryptocurrencies to drop as well. Right now, based on data provided by CoinMarketCap at 11:00am PST on November 20th, Bitcoin is trading at $4,622.79, which is the result of an 8.43% drop in the last 24 hours. Bitcoin Cash has suffered a 30.2% drop in the last 24 hours as well.