Here's Why Bitcoin and Other Cryptocurrencies Are Down Today
Bitcoin (BTC-USD) and most other major cryptocurrencies are falling on Wednesday, with bitcoin, Ethereum, Ripple, bitcoin cash, and Litecoin all in the red. There are two particular negative news items that could be weighing on the market today; here are the details.
Today's cryptocurrency prices
As I mentioned, the cryptocurrency market is largely negative today. Of the top 10 cryptocurrencies by market capitalization, all but one, NEM (XEM-USD), are down on Wednesday.
Of the top 10, NEM (XEM-USD) is the only one rising today, continuing a multiday rally. In fact, the digital currency is up by more than 43% over the past week on news that the Coincheck exchange has begun reimbursing customers affected by January's massive NEM-specific hacking incident.
Google bans cryptocurrency ads
About a month ago, Facebook announced a new policy banning cryptocurrency and initial coin offering (ICO) advertisements, and Google is now following in its footsteps.
On Tuesday, Google announced that it plans to ban ad content "including but not limited to initial coin offerings (ICO), cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice." The restriction takes effect in June and will extend to all of Google's ad platforms.
Effectively, this blocks cryptocurrency-related businesses from using two of the largest ad platforms in the world. While this is obviously intended to protect investors from scams and excessive speculation, it appears to be weighing on the entire cryptocurrency market.
A major analyst thinks bitcoin is "worthless"
A new analyst note from Allianz Global Investors warns that bitcoin (BTC-USD) is worth nothing, even if blockchain technology continues to evolve.
The rationale? "A bitcoin is a claim on nobody -- in contrast to, for instance, sovereign bonds, equities or paper money -- and it does not generate any income stream." The note also said that bitcoin "ticks all of the boxes" of criteria for a bubble. And while the note was about bitcoin, it's fair to say that the logic would extend to other cryptocurrencies as well.
To be fair, I realize cryptocurrency investors are generally not swayed in their opinions based on the warnings of Wall Street types. Warren Buffett, Jamie Dimon, and Carl Icahn have all been just as negative as Allianz on bitcoin and other cryptocurrencies, and it hasn't done much to prompt speculators to sell.
However, notes like these could have an effect on would-be investors sitting on the sidelines -- this could make them think twice. Bitcoin and other cryptocurrencies, at this stage, rely on growing investor interest, and prestigious figures in the financial industry can certainly influence this growth.
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Matthew Frankel has no position in any of the stocks mentioned, but owns Ethereum and Litecoin tokens. The Motley Fool owns shares of and recommends Facebook and has no position in any cryptocurrencies mentioned. The Motley Fool has a disclosure policy.