In one word FUD. “Fear, Uncertainty, and Doubt” created by the world’s banks. Banks are scared of losing their grip on how people manage their own money. For centuries, banks made people believe that they know better how to manage everyone’s money and you’d be better off letting them do it than to try to do it yourself. They have built a monopoly on savings, credit, trade, and investments. And the fact that managing all these markets can be conducted, securely, efficiently, and quickly, in peer-to- peer transactions between individuals without the need for a centralized system is simply a threat to their very existence.
In order to combat Crypto-currencies, the banks use FUD as a tool to first dissuade people from getting into Crypto. They line up “experts” to warn people about how unpredictable, unstable and even dangerous investing in crypto can be. They denied credit cards use for purchasing crypto-currencies citing that in doing so they were protecting consumers from spending too much money and overstretching themselves financially.
When that didn’t stop people from investing on crypto, they pleaded to governments that crypto presented a risk to their business. The US reacted swiftly through an SEC (Securities and Exchange Commission) statement requiring crypto-currency exchanges to register with the agency if they sell crypto as securities. That statement stalled crypto trading almost immediately causing the price of Bitcoin to drop $3000 in a matter of hours.
However, this action backfired on the banks as people are adapting to the price drops using the dips as an opportunity to buy and then sell later.
As of today the market is expected to go down below 8K. Maybe 7, but not much further down. This is because 8K is Bitcoin’s dogged support line. Whenever the price falls below the eight thousand support line it struggles because people starts buying and that pushes the price back up to $12,000. 12K is the resistance line because that’s the average price on which buyers sell and cash out on the short-term profits.
In desperation, the banks are now attacking crypto mining; creating new FUD on the possible existence of unscrupulous miners bent on taking over the world’s computer system to use for criminal purposes. Mining is a crucial part of how cryptocurrencies work as they serve to validate transactions in a process called Proof-of- Concept. The banks are instilling FUD by suggesting open source or public Blockchains are vulnerable to hackers posing as miners and implanting malware to take over computing systems. The banks are then calling for the entire crypto market to be shutdown in order to prevent hackers from taking over any computing devices from cell phones to servers and using the profits to finance terrorism, money laundering, tax evasion, and child pornography.
As an alternative they float the idea of a fully centralized or semi-centralized Blockchain network like Ripple – one that works for the banks and not against it. And given the open source design of crypto-currencies, a centralized or private version of the Blockchain is not only possible but already being developed for the private sector. Major institutions like Amazon are already contemplating the benefits of using Blockchain technology to advance their business.
Unfortunately this will defeat the purpose of the existence of crypto altogether and turn it into another control mechanism the banks can use to maintain the status quo. By centralizing crypto-currencies, the banks can decide on a single platform to run all coins, control the release of ICOs (choosing favorable terms and price for accredited investors), and have a free hands in the fees charged on every transaction.
The most effective approach to deter crypto so far is regulation. Every country struggles on the best approach to control the speculative aspect of the crypto market. And while it is impossible to predict the precise effects government regulation will have on the crypto market, one can assume regulation will most likely take form of a hybrid system where the banks will assert some form of authoritative position. In the meantime, crypto investors will have to contend with the FUD about the future of the crypto market, used by the banks as a warning to consumers but in reality created by them.