Local Bitcoin investors unmoved by price drop

The trading value of Bitcoin has dropped by 48 per cent in the last one month from $19,343 (Sh2,002,000 ) to the current $11,410 (Sh1,181,006 )

This means that an investor who bought one Bitcoin in mid-December 2017 stands to lose about Sh980,806 should they decide to sell it today.

“Bitcoin is a currency like any other currency, it’s bound to lose and gain value. Despite the recent fluctuation, it has continued to record an uptrend since its introduction in 2009 due to a growing demand, and we expect it to rebound more strongly in 2018,” Rewell Kinuthia, a local investor, said.

THE SOUTH KOREAN EFFECT

While many have termed the drop in its value as a bubble, another investor, William Otiso, dismissed such terms saying it’s a price adjustment.

He attributed the value dip to an announcement by the South Korean government to introduce new regulations that will guide Bitcoin trading in his country. The Asian country is the largest trader of Bitcoin in the World.

The new rules, which are set to kick off tomorrow, will ban the use of anonymous bank accounts to make crypto transactions, keep underage investors and foreigners from opening accounts in any South Korean exchange, and will heavily tax virtual currency exchanges.

ADOPTING BLOCK-CHAIN TECH

“The value of a currency will not always remain straight, Bitcoin has not gone through any legislation yet and while we expect it to recover, we should also expect a rise and fall in its trading value going forward,” Otiso said.

“We are resilient because in the long run it’s not a hit or a miss, Bitcoin is not a ponzi scheme and we are not giving up as this is the way of the future.”

Unlike traditional currencies such as the shilling and the dollar, which are regulated by government, Bitcoin just like other digital currencies operates independent of a regulator.

They are organised in a system known as block-chain, an online ledger, that keeps a record of all transactions made in a centralised place.

Despite warning local investors on investing in Bitcoin and that they should be ready to lose their money, Central Bank Governor Patrick Njoroge is on record hailing the block-chain technology, saying that it is something that can be useful. He cautioned local investors and told them to be ready to lose all their money.

“We are not anti-technology, the issue is about safety,” he said.

KCB group chief executive Joshua Oigara reiterated this, saying the technology could be adopted to enhance transparency in the banking sector.

 

Source