Cryptocurrency bitcoin has had a whirlwind couple of months. It finished trading on Wednesday (Dec. 13) at a value of $16,835 per bitcoin, but agencies around the world are concerned the virtual currency represents something potentially dangerous: a bubble that could pop at any minute. From investigations into illegal exchanges to real estate transactions made only in the digital currency, here’s some of the latest news in the bitcoin daily roundup.
Unregulated Bitcoin Exchanges In India
One week after the Reserve Bank of India (RBI), India’s central bank, cautioned cryptocurrency users about the potential risks of digital currency trading, Indian income tax officials have launched investigations into transactions made at illegal bitcoin exchanges. Though digital currencies do not have a legal status in India, the Income Tax Department is conducting surveys on virtual currency exchanges in Bengaluru, Delhi, Gurgaon and Mumbai, according to department spokeswoman Surabhi Ahluwalia, and rumor has it the investigations are seeking evidence of money laundering or tax evasion.
RBI issued a cautionary statement earlier this month advising citizens to avoid transacting in cryptocurrencies. The statement also reminded readers that digital currency exchanges are not permitted to operate in the country. A federal government-backed panel headed by Subhash Chandra Garg, economic affairs secretary, will meet to decide India’s current and future stance on trading in digital currencies.
Turkish Prime Minister Calls Bitcoin History’s ‘Biggest Bubble’
Mehmet Simsek, Turkey’s deputy prime minister and chief economic policy maker, recently called bitcoin “the biggest bubble in finance history,” according to Wednesday comments on Twitter. ““Just as Bitcoin’s price suddenly rises excessively, it could also crash,” Simsek said.”
Economy czars in the country have sent mixed messages about cryptocurrency, with some saying the digital currencies could offer financial stability under the right conditions, and others saying the virtual payment options pose risks in terms of both money supply and price stability. In a somewhat pro-cryptocurrency move, a digital currency working group comprised of market participants, policy makers and regulators is analyzing the possibilities of digital currencies in the country. Conversely, Turkish market regulator Capital Markets Board has ordered brokerages to avoid trading in virtual currencies as of Nov. 27.
Bitcoin Futures Plunge 10 Percent, Halt Briefly
Chicago Board Operations Exchange (Cboe) bitcoin futures, which saw two trading halts on Sunday night after their debut and subsequent trading surges, fell 10 percent in trading Wednesday. The result of the decline was yet another trading halt, this one lasting two minutes, though the futures settled in at $17,055.
Bitcoin futures allow traders to short the cryptocurrency, and Jeffrey Gundlach, CEO of DoubleLine Capital, noted on CNBC’s Halftime Report that he believed “if you short bitcoin today, you’ll make money.” Cboe launched its futures last Sunday, and CME Group will launch its own on Dec. 17.
Mexico Keeps An Eye On Criminal Cryptocurrency Offerings
Joining the ranks of countries like China, India, Russia and the U.S., Mexico’s central bank and finance ministry issued a warning that virtual currencies were risky investments. It also noted that initial coin offerings (ICOs) could be against Mexican law, as virtual currencies are not officially recognized by the country as a legal form of payment.
“Depending on their specific characteristics, some ICOs that originate and are emitted in Mexico could violate the Markets and Securities Law and constitute a financial crime,” regulator CNBV said in a statement. “Given their nature, virtual currencies have shown high volatility, as they are the subject of broad speculative activity.”
So far, no ICOs have originated in Mexico. The same authorities urged investors to remain “vigilant” for any indicators of fraud.
Condo Seller Decides To Only Accept Bitcoin
A condo seller in Miami, Florida, has decided to only accept bitcoin as payment for the property. The penthouse condo is listed on Redfin for a price of 33 bitcoin, or approximately $544,038, and is the first listing for which a seller is requesting cryptocurrency, according to the real estate marketplace.
“It's the only one we could find where the seller was only accepting bitcoin, but when we searched our database of listings across the country we found about 75 properties in the listing remarks where the seller said they would accept bitcoin as payment,” a Redfin spokesperson said, though those sellers noted they would also accept other methods. “This is interesting because it looks like it's $33 but it's 33 bitcoin. We noticed a lot are in south Florida and in California, where they mention bitcoin, though they're all around the country. We're going to be polling agents to see if buyers who came into bitcoin are going to be buying.”
This would not be the first real estate transaction paid in bitcoin, however. A home in Texas was purchased in bitcoin earlier this year, though the buyer converted the cryptocurrency to regular U.S. dollars before finalizing the purchase.
Federal Reserve Calls Bitcoin ‘Highly Speculative’
Because bitcoin has surged to 17 times its worth this year, bankers around the world have cautioned traders about the risks involved in cryptocurrency. Janet Yellen, Federal Reserve chair, recently called the virtual currency a “highly speculative asset” that “doesn’t constitute legal tender.” She also added that the cryptocurrency currently “plays a very small role in the payment system.”
Other high-ranking officials have made similar comments in recent months. William Dudley, president of the New York Federal Reserve, said he was skeptical of the virtual currency and added it was “not a stable store of value.”