Bitcoin Goes Below $7,300 After Large Banks Ban BTC Purchases With Credit Cards

Bitcoin Goes Below $7,300 After Large Banks Ban BTC Purchases With Credit Cards

On February 5, bitcoin’s price has fallen below the margin of $8,000 – again after Friday’s decrease to $7,695. This time, the drop is formidable as it reached the low of $7,244, according to Coindesk. Notably, later after the Friday’s decline, several large American and British banks announced their decision to stop their clients from purchasing crypto assets with credit cards.

“Hands-off” Bitcoin?

Not all bank clients will now be able to buy cyber currencies using credit cards. Among them there appeared to be customers of Citigroup, J.P. Morgan Chase, as well as Bank of America. All of them claimed about their bitcoin-unfriendly intentions of February 2, as CNBC reported.

In particular, J.P. Morgan Chase representative said:

"At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved. We will review the issue as the market evolves."

In his turn, the representative of Bank of America also confirmed that the institution declines credit card when people try to buy cyber assets.

Citigroup made a similar announcement, adding that it might look through the policy depending on changes in the crypto industry.

The changes were set after bitcoin’s month of failure. Since the beginning of 2018, the most known crypto-coin in the world struggled to recover from mid-December correction, experiencing a set of drastic gyrations. Literally speaking, the price of BTC halved since December 21, when it cost around $15,000.

Moreover, within the last week, the price of bitcoin has been heading downwards, falling below $7,700, a few hours before large banks’ announcement. These are the frustrating results, which bitcoin has not seen since the end of fall 2017. However, it is not the only ‘Big Daddy,’ which suffered decreases. Altcoins have also been going through a stormy period on the crypto market, following the lead f BTC.

A New Member of The Team

Besides three American groups, on February 5, UK’s Lloyds Banking Group has swollen the ranks of bitcoin-unfriendly companies. Starting from today, bank’s credit card users are hindered from purchasing any crypto-coins. However, the ban does not restrict the rights of debit cards users.

According to The Telegraph, the British bank is declining the usage of 9 million credit cards for purchasing cryptos. Such decision has been made to prevent ensuing unsettled debts in case cyber assets’ prices experience another slump.

Lloyds is the first UK bank which decided on the ban. Furthermore, it has also broadened the taboo on its affiliates, e.g., Bank of Scotland, Halifax, and MBNA. As the bank’s spokesperson emphasized, by this decision, the institution wanted to safeguard its clients from unaffordable casualties.

A few hours after The Telegraph reported the issue, bitcoin’s price went through another slide, reaching the devastating low of $7,244.

Nevertheless, significant banks decision to bar its customers from buying cryptos using credit cards is only one of the factors that cause the market’s correction. Lately, it was also reported that China intends to escalate cryptocurrency crackdown, whereas Japan is still recovering from late January’s Coincheck hack, which led to the loss of $530 million of NEM.