Bitcoin ban: Value predicted to halve as cryptocurrency may be ‘outlawed like 1930s gold’ | City & Business | Finance

The cryptocurrency recorded the biggest one-day drop for almost two months last Sunday. The retreat came after Bitcoin (BTC) hit a record high of more than $64,000 (£45,773) last Wednesday following the stock market debut of the US’s largest exchange for the tokens, Coinbase Global Inc. The cryptocurrency is now just under $55,000 (£39,747), but JP Morgan analysts have warned that if the Bitcoin price does not regain ground above $60,000 (£43,361) soon, its momentum signals will collapse.

And Guggenheim Partners’ veteran financial figurehead Scott Minerd warned BTC has overstretched itself at a dangerous speed, meaning it could dramatically halve in value over the coming weeks.

But Mr Dalio says there is also a “good probability” Bitcoin will be banned by the US government.

He told Yahoo Finance: “Every country treasures its monopoly on controlling the supply and demand.

“They don’t want other monies to be operating or competing, because things can get out of control.

“So I think that it would be very likely that you will have it under a certain set of circumstances outlawed the way gold was outlawed.”

In the Thirties, Former US President Franklin D. Roosevelt made gold ownership illegal in the US in an attempt to shore up the Federal Reserve’s gold supplies to justify printing more dollars.

Mr Dalio pointed to India drafting a bill to ban digital currency.

The proposal seeks to prohibit mining, holding, selling, trade, issuance, disposal or use of cryptocurrency in the country, with a penalty of up to 10-years in prison.

He added: “We have to see what it means.

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In February, Treasury Secretary Janet Yellen warned Bitcoin is an “extremely inefficient” way to move money and sees it mostly as a facilitator of “illicit finance.”

Moreover, the US, China, EU and UK are all looking at setting up digital versions of their currencies.

Financial analyst Andy Hecht explained: “Digital currencies are the future. However, they create problems for governments that control the money supply.

“Money creates power, so central banks, monetary authorities and governments are not excited about this new asset class that seeks to replace money with a technological alternative.

“Still, it won’t be long before they capitulate and reach a happy medium by rolling out their own digital currencies.

“China looks to be the first country to do so, on the verge of a digital yuan, which fits right in with the Asian nation’s goal of domination for its currency as well as for the world’s second-largest economy and the largest population.”

Britain’s Financial Conduct Authority (FCA) has previously warned against investing in crypto.

It stated: “If consumers invest, they should be prepared to lose all their money.

“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.

“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”

Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.