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If Bitcoin is popular among several investors, it isn’t the same among various financial institutions, when they feel their hegemony is threatened. Many people from JP Morgan publicly spoke in negative terms about cryptocurrencies, and they did it again when Mike Bell claimed that the government would ban these sooner or later.

Actually, Bitcoin represents a pyramidal system which doesn’t make much sense, lacking in fundamentals; and it will fall apart. This was the discourse of Richard Kovacevich, a senior CEO of the Bank and American financial group Wells Fargo.

Various bankers that are against cryptocurrencies have joined in and helped spread this FUD (Fear, Uncertainty and Doubt). But their assaults faded when the FUD was finished.

This speech coincides exactly with the FUD created by South Korea.

While insiders within the South Korean government manipulated the market voluntarily, other actors like Mike Bell use this FUD to influence the market in a negative way.

Why financial institutions are against cryptocurrencies?

Actually, it’s more than normal for a banking institution to dislike an asset whose existence implies that banks wouldn’t be needed anymore in the future. Indeed, a virtual currency that isn’t controlled by any country or bank doesn’t require the validation or assistance of these to circulate worldwide.

If everything goes well for Bitcoin and its friends in the next years, banks might as well be obsolete, so they’re fighting like they can to avoid that. Pointing out each weakness of the cryptocurrencies is one way to fight them.

JP Morgan understood it’s the right moment for another strike against the virtual currencies - and the Bitcoin. He pointed out that the regulation of the asset isn’t effective yet, and also since it isn’t well regulated, it can still be used for money laundering without anyone being able to do anything against that.

Would there really be a ban?

Big amounts of money are daily used to trade cryptocurrencies, and the government actually has no control over such transactions.

The USA are naturally worried about the various ways people could use these virtual assets against the law. It’s possible for people to make illegal use of this currency because Bitcoin can give you total anonymity.

You don’t have to give your identity to a peer if you want to make a transaction. Most of the steps of the transactions are encrypted, and you can change your Bitcoin address whenever you want.

When facing such an issue, the government only has two solutions: regulation of the cryptocurrency or a ban. However, both would be hardly doable, because the difficulty to trace every transaction made between two people.

Upon that, a ban wouldn’t stop the use of the currency, it would only take it off-stage, and thus would make them even more dangerous, since you wouldn’t be able to keep an eye on them. It would also be a strike for every American citizen who bought these currencies because most of the investors would lose money in the process.

Why would regulation be more effective?

The most reasonable solution to adopt would be to regulate the cryptocurrencies. Thanks to some of its qualities, it’s seemingly here to stay, may it be the Bitcoin or any other of its peers.

If the government accepted it as an official currency, it would be easier for them to track down every transaction with the cooperation of exchanges. Among the decisions, they could take, there the obligation for exchange users to give their identities in order to be able to create and use an account.

If a regulation of the cryptocurrencies would be easier and more effective than a ban, no one said it would be easy at all. It would require the collaboration of every nation concerned on the globe.

Otherwise, every currency would “leak” on specific countries providing unfair advantages to their users, like what happened with taxes in the past. It would take a few years before such regulation would be totally effective, but in the end, it would be totally worth the effort.

A lesson to be remembered for the next FUD

Losing 30% of your portfolio in less than 24 hours can cause certain emotions which will be used by actors for their own interests.

But before starting to get interested in it, it is important to analyses the objectivity of these so-called experts and really checking for their level of expertise.

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