Here’s Why Bitcoin, Ethereum, and Ripple Are Falling Today

After a stratospheric rise in late 2017, bitcoin and other cryptocurrencies have hit a bumpy road so far in 2018. And many of the big downward swings can be attributed to regulatory uncertainty, both in the U.S. and around the world.

Thursday's move is no exception. All but one of the 10 largest cryptocurrencies are in the red today, as two unsettling regulatory developments are weighing on the market.

Today's cryptocurrency prices

As I mentioned, most major cryptocurrencies are negative today. Here's a look at the 10 largest cryptocurrencies by market capitalization, and how much each has changed over the past 24 hours.

A leading cryptocurrency exchange faces potential scrutiny

The first major news item of the day involves Binance, one of the world's largest cryptocurrency exchanges.

In a nutshell, unconfirmed reports indicate that Japan's Financial Services Agency (FSA) is planning to warn Binance (which is based in Hong Kong) about operating without registration in the country.

Japan's FSA did indeed make cryptocurrency exchange registration mandatory last year, but Binance denies any knowledge of the supposed warning. In fact, CEO Changpeng Zhao tweeted that the company has been in "constructive dialogs" with the FSA, and has received no such warning.

What's in store for the U.K.?

Another regulatory news report today says that the U.K. is forming a cryptocurrency task force, to look into the benefits and risks of cryptocurrencies.

It's worth noting that this is likely not as much of a drag as the Binance news, as the statement revealing the task force formation as well as other U.K. cryptocurrency comments have been generally positive. While the U.K. certainly wants to crack down on scams and warn investors of risks, the indication is that the intention is to make it as easy as possible for fintech firms to comply with any regulations and to capitalize on the potential benefits of these digital assets.

However, at this point, the eventual state of U.K. cryptocurrency regulations is uncertain.

Regulations could be good -- but uncertainty is bad

To be clear, the problem isn't necessarily that the cryptocurrency markets could be more strictly regulated. In fact, regulation could potentially help calm volatility and make cryptocurrencies more appealing as payment methods and stores of value.

Instead, the problem is uncertainty over what those regulations might be. At this point, there are simply too many unanswered questions. For example, are established cryptocurrencies going to be considered "securities," or does that definition only apply to initial coin offerings (ICOs) meant to capitalize businesses?

Getting the answers to questions like this could provide some much-needed clarity. Uncertainty is generally an enemy of any type of investable asset, and cryptocurrencies are no exception.

Bitcoin is overhyped: 10 better buys for you nowWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and investing directly in Bitcoin was noticeably absent from their recommendations! That's right -- they think these 10 stocks are better buys.

Learn more

{% render_component 'sa-returns-as-of' type='rg'%}

Matthew Frankel owns Ethereum and Litecoin tokens. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool has a disclosure policy.