Cryptocurrency Latest: A Facebook coin, fraud and why the fluctuation?
Can social conversation really dictate cryptocurrency performance and why is fraud such a problem? The Tradefair team brings you the latest cryptocurrency roundup...
“The statistics show that opportunistic fraudsters are taking advantage of this market, offering investments in cryptocurrencies and using every trick in the book to defraud unsuspecting victims.”
- Pauline Smith, Director of Action Fraud.
Cryptocurrency investment remains a never-ending game of two halves. Just when investors think they've got it figured out, another spike or fall reminds them that they have nothing of the sort. While this keeps the more restrained away from trading, it's what draws others - who love the added element of risk - in.
Here are some of the latest stories emerging from the world of cryptocurrency:
Former Facebook Exec steps away from Coinbase board
David Marcus, the former head of Facebook Messenger who now leads a blockchain-focused group at the social media giant, has announced that he will step down from the board of cryptocurrency trading platform Coinbase.
Fortune suggests the move is a result of Facebook having "ongoing and serious" blockchain ambitions, which could include launching its own cryptocurrency. However, according to the social media giant itself, it's precautionary action to "avoid the appearance of conflict" between Marcus' two roles.
Reports have claimed that Facebook has been trying to integrate financial data into its platform, which would be a clear signal that the social media giant is looking to expand into finance and ecommerce. However, given Facebook's recent data scandal, it could be an alarming prospect for many.
Crypto fraud on the rise
City of London Police have reported a rise in cryptocurrency fraud, according to the Financial Times. The force warned of the threat after more than 200 people admitted to having lost more than £10,000 in two months through scams.
Figures from Action Fraud cited by the UK police found that victims lost £2.1 million through fraudulent schemes. The largely unregulated nature of cryptocurrency has led to the market being used for criminal activity, like money laundering, and is part of the reason why authorities are under such pressure to implement rules.
Director of Action Fraud Pauline Smith said: "The statistics show that opportunistic fraudsters are taking advantage of this market, offering investments in cryptocurrencies and using every trick in the book to defraud unsuspecting victims."
The City of London Police has launched the first cryptocurrency course in the UK to help officers be better prepared to "recognise and manage cryptocurrencies in their investigations".
What causes cryptocurrency fluctuations?
A recent report from the Telegraph looked to explain why the cryptocurrency market is so prone to dramatic fluctuation. Citing figures from Pulsar's New Social Currency report, it looked at the way people regard cryptocurrencies as a whole.
The analysis found that the anonymity of cryptocurrencies remains one of its major draws, especially in the mainstream, but that countability of fraud still deters many from making significant investment.
But what causes the sudden highs and lows? The Pulsar report found that the success of cryptocurrency value is tied to public sentiment. This means that social conversation could be used to predict future changes in the market, adding an element of predictability for traders.
Analysis from Investopedia ties in with this, naming the top eight reasons why bitcoin is so volatile, which included: bad press, fluctuating perceived value, security breaches and high profile losses.