Big Banks Ban Bitcoin Buys – JPMorgan, Bank of America, Citigroup Say No to Crypto Credit Purchases
JPMorgan, Bank of America, and Citigroup are all putting a stop to Bitcoin purchases made using their cards, citing high risk due to extreme price volatility.
Credit Card Declined
With Bitcoin suffering one of its worst weeks since 2013, major US banks are putting a stop to Bitcoin and other cryptocurrency purchases made using their credit cards. According to reports, JP Morgan Chase, Bank of America, and Citigroup are all banning cryptocurrency purchases using their credit cards, leaving some investors eager to “buy the dip” out in the cold.
From the credit card providers’ point of view, it’s easy to understand why the decision to ban cryptocurrency purchases has been made. Unlike most other purchases made with credit, cryptocurrency purchases are exposed to extreme price volatility, increasing the potential for a dramatic drop in value.
“At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved,” a J.P. Morgan Chase spokesperson said in a statement to CNBC. “We will review the issue as the market evolves.”
A Hard Fall
The decision to ban Bitcoin purchases with certain credit cards comes after a steep and unprecedented run-up at the end of 2017, which has since been followed by a sharp decline.
Over the past year, Bitcoin has surged more than 700%, reaching highs of $20,000. On February 2, however, Bitcoin reached lows of under $8,000 – and some inexperienced investors who FOMO’d (Fear of Missing Out) into the cryptocurrency market at its all-time high using credit may have already panic sold.
Alternative cryptocurrencies (altcoins) have also seen sharp declines in 2018, with many experiencing significantly greater losses than Bitcoin.
A seemingly endless stream of FUD (Fear, Uncertainty, and Doubt) spurred on by mainstream media sources certainly hasn’t done the cryptocurrency market any favors, heightening fears that Bitcoin – and the cryptocurrency market as a whole – is a bubble already in the process of bursting.
While some investors new to the cryptocurrency market have swallowed a bitter pill over the last month, many experienced investors are frothing at the mouth, eager to purchase Bitcoin and altcoins at what can be construed as a steep discount.
The decision to ban crypto purchases via some major credit cards thus comes at a difficult time for those looking to capitalize on what could potentially be the lowest prices of the year.
What are your thoughts about major credit card providers’ decision to ban Bitcoin purchases? Have you purchased cryptocurrencies using credit? Let us know in the comments below!
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