The Commodities Futures Trading Commission (CFTC) has ordered an investigation into four exchanges iBit, Coinbase, Kraken, and Bitstamp on suspicion of price manipulation. However, the routine investigation news sent the stock prices into negative territory. The price of Bitcoin (BTC) has dropped by over 7% to settle at $6797.57.
The unregulated cryptocurrency markets are witnessing huge price fluctuations. It is treated as illegal trading. However, such unethical trading practices are spreading to the traditional finance worldwide and inviting regulatory measures.
The CFTC is looking at the trading data of the crypto exchanges to find dubious transactions. However, Kraken and Bitstamp are complying with the European Regulations mainly in maintaining a healthy relationship with the banks and in handling the funds.
Ibit is compliant with the US laws in New York. Coinbase is also one of the legalized exchanges in the US. All the four exchanges are ensuring KYC norms. But, they are somewhat relaxed when it comes to the trading.
The government investigators in the US have asked the bitcoin exchanges to submit a comprehensive trading data. It is to ascertain whether the trade manipulation is causing price distortion in the markets that linked to the digital currencies.
Bitcoin is under pressure
Bad News such as the hacking of the Coinrail Exchange is putting additional pressure on the Bitcoin. According to John McAfee, the investigation is spoiling the bull run. The digital currency is also seeing a huge debate over the weekend about modifying the change of work. If it is allowed, ASIC will be disabled for the Bitcoin. It is likely to spread to other coins too.
If the value of BTC is changing so rapidly, how it can be treated as valuable and immutable. All these questions are being churned online casting a negative impact on the digital currencies.
Bitcoin Likely to Regain After a Two Month Drop
After two months of price decline, Bitcoin is likely to stage a rebound. But, it could be short-lived as per the technical indicators. BTC has gained 3% to settle at $6825. The recovery is from the extremely sold condition. It may gain further in the next 24 hours.