ban bitcoin

Three more credit card issuers have announced that they will automatically decline transactions associated with purchases of bitcoin and other cryptocurrencies, adding their names to a growing list of legacy financial institutions who have adopted hostile policies toward cryptocurrency in the wake of the recent market decline.

Three More Credit Card Issuers Ban Bitcoin, Cryptocurrency Purchases

Effective immediately, customers will no longer be able to use JPMorgan Chase, Bank of America, or Citigroup credit cards to finance their cryptocurrency investments, according to a report from Bloomberg.

The move deals another serious blow to the already-battered cryptocurrency markets, as JPMorgan and Bank of America are the two largest US banks, while Citigroup ranks fourth on the list.

A recent survey from LendEDU found that 18 percent of cryptocurrency investors financed their purchases with a credit card. While some likely did so out of convenience or to accrue rewards points, the survey also found that more than one-fifth carried the balance, perhaps indicating that they were gambling that they would be able to use profits from a price increase to pay back their debts.

This, a JPMorgan spokesperson said, presents the card issuers with too much credit risk, as these customers are more likely to default on their payments if the market heads south, as it has in recent weeks.

This updated policy brings the three card issuers in line with credit card processing giants Capital One and Discover, who had already banned customers from using credit cards to purchase cryptocurrency.

Meanwhile, Zerohedge reports that Coinbase has begun sending customers notices indicating that credit card processors who still allow cryptocurrency purchases have begun charging additional “cash advance” fees for transactions made at Coinbase and other similar brokerage platforms.

Fintech Startups Embrace Cryptocurrency

Notably, while credit card issuers move to ban bitcoin, upstart fintech firms are racing to provide investors with more convenient and user-friendly ways to buy and sell cryptocurrency.

Digital payments processor Square recently provided US customers in 46 states with the ability to buy, sell, and hodl bitcoin from directly within its popular Cash App, which ranks as one of the most widely-used financial apps in both the Google Play and App Stores.

Mobile brokerage platform Robinhood, meanwhile, is gearing up to launch a full-scale cryptocurrency trading platform this month, and more than one million people have already pre-registered for the service.

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mark cuban bitcoin

When mainstream investors and analysts discuss bitcoin investing, their answers are often so divergent that one could question whether they are even talking about the same asset.

This contentious debate has heightened in recent months, as the bitcoin price has repeatedly shattered records and carried the markets to fresh all-time highs. That trend continued on Saturday, as the bitcoin price rode a post-Thanksgiving wave of euphoria to a new high-water mark of $8,754 on bitcoin exchange Bitfinex.

bitcoin price
Bitcoin Price Chart | Source: BitcoinWisdom

The bears have been out in full force. JPMorgan CEO Jamie Dimon says bitcoin is a “fraud,” even though his firm might help clients trade bitcoin futures, and other entrenched financiers have issued similar condemnations.

That said, the list of bulls is steadily growing, with market observers such as billionaire hedge fund manager Mike Novogratz beginning to realize that it is a revolutionary technology.

Mark Cuban, a long-time cryptocurrency skeptic, has softened his stance in recent months, but he still believes cryptocurrency is “more religion than asset” and that bitcoin investing is a longshot — but one that aggressive investors should consider taking.

In a recent interview with Vanity Fair, the dotcom billionaire and Dallas Mavericks owner advised prospective investors to take a conservative approach, allocating the majority of their assets to a simple S&P 500 index fund. However, he added that “true adventurers” should place as much as 10 percent of their savings into bitcoin and ethereum.

“If you’re a true adventurer, and you really want to throw the Hail Mary, you might take 10 percent [of your investment capital] and put it in bitcoin or ethereum,” he said.

Now, very few Hail Mary attempts succeed, and Cuban cautions those willing to take the chance that they should be prepared to lose all of their money.

Nevertheless, those true adventurers who did take the plunge into bitcoin investing on Cuban’s advice have already been richly rewarded. Since Cuban issued this suggestion on October 18, the bitcoin price has already risen by 60 percent, increasing the value of a hypothetical $10,000 investment to $16,000.

Counting the value of any coins derived from Bitcoin Gold, an altcoin that forked away from the main bitcoin blockchain in late October and airdropped coins to anyone holding bitcoin funds at the date of the fork, the present value of that initial investment rises to nearly $17,000.

if this trend continues, it won’t be long before Cuban’s bitcoin Hail Mary begins to look more like an extra point attempt.

Featured Image from ABC News