Lloyds Banking Group bans the purchase of Bitcoin by credit card
The Lloyds Banking Group has banned its customers from buying Bitcoin with any group-issued credit card. The move comes amid widespread concerns about the slump in price of the cryptocurrency and Lloyds Group has stated that it does not wish customers to experience unaffordable losses as a result of risky Bitcoin purchases. Lloyds Banking Group includes Halifax, Bank of Scotland and MBNA and controls approximately 25 percent of the UK credit card market.
Volatile Asset
Bitcoin prices averaged around $700 in January 2017 and had soared to a peak of around $20,000 by December 2017, creating a number of newbie millionaires from early investors in the cryptocurrency. Lloyds announced the ban on credit card purchases of Bitcoin on 12 February 2018, when prices were languishing at around $8,000.
The move from Lloyds corresponds to bans on credit card purchases of cryptocurrencies by JP Morgan Chase, Citigroup and Bank of America. JP Morgan Chase and Bank of America are the two largest banking corporations in the United States and have stated that credit card purchases on cryptocurrency exchanges will automatically be declined. All of these banks highlighted similar concerns regarding issues relative to customer affordability, if cryptocurrency prices should continue to drop.
Price Manipulation
Commentators have also raised recent concerns regarding price manipulation at Bitfinex, which is one of the largest cryptocurrency exchanges in the world. JP Morgan Chase and Bank of America have joined Capital One and Discover in banning the purchase of all cryptocurrencies on the major cryptocurrency exchanges and it remains to be seen whether the Lloyds Banking Group will follow suit and issue a blanket ban on the purchase of any cryptocurrency using a group-issued credit card.
Most of the financial analysts and experts who remain optimistic about the future of cryptocurrencies will still only recommend investing no more than 10 percent of net worth into these cryptoassets. However, hedge fund manager, Brian Kelly, who founded BK Capital Management is so convinced of the value of these investments that he’s tied up 90 percent of his assets in cryptocurrency.
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Sources:
Strategicoin.com – JPMorgan Ban