Despite repeated warnings from global financial regulators and professional market analysts that bitcoin is in a dangerous bubble, the price of the crypto currency continued to climb on Wednesday, heading steadily towards the $20,000 mark. According to Coinbase, bitcoin was trading at $17,248.47 as of 1:58 p.m. HK/SIN, down from highs of $17,748.58 earlier in the session. Bitcoin is now up 178.74 percent since last month.
South Korea announced on Wednesday that it is considering implementing a capital gains tax on profits from cryptocurrency trading, and that minors will soon be prohibited from opening cryptocurrency trading accounts. Australian central bank governor Philip Lowe also warned against cryptocurrencies on Wednesday, claiming that their continued rise feels like a “speculative mania.” The U.S. Securities and Exchange Commission was the first to warn that cryptocurrency trading may violate federal securities law, though few details were provided about how to avoid this transgression or whether such trading is entirely illegal.
Warnings Abound
Just last week, Stefan Ingves, chairman of global regulators at the Basel Committee and governor of Sweden’s Riksbank, commented that bitcoin trading is extremely risky and that he questions whether bitcoin should even be classified as a cryptocurrency. He noted that banks are fully aware of developments in the financial technology sector, but that “it’s a bit too early to say where that will take us when it comes to regulatory frameworks.”
Ingves’s comments followed those of Carlo Messina, the CEO of Intesa Sanpaolo Bank, Italy’s top retail bank, who called for global cryptocurrency regulation at the start of December. Messina warned that bitcoin is in a speculative bubble and that the price fluctuation is entirely speculative. He added that he would “never” invest in bitcoin and that global regulatory authorities must deal with the issue immediately.