One of the inevitable fall outs of the global outrage on ISIS after the Paris attack is an attempt by all countries to choke ISIS of its funding sources. It is estimated that ISIS holds a huge stock of Bitcoins which is the known standard currency for cyber criminals and terrorists.
After the Silk Road expose, Bitcoin suffered a major blow as it acquired the notoriety as the choice currency of the underworld. However it was slowly coming out of the reputation crisis and trying to re-establish itself on the strength of the momentum gained by a large number of non criminal owners of Bitcoin.
From its glorious days of 2014 when Bitcoins were valued at over Rs 65000/- in India, the value has now tumbled down to around 20940/- at present. In the last two days, the international price of BTC has dropped from around $340 to around $315. In the current trend it may test the $250 support line and head further south.
The current crisis now has brought global attention on Bitcoins and many Governments are considering “Demonetizing” (Banning) Bitcoins. It is interesting to note that the readers of mirror.co. uk have voted in a 53% majority (as of now) that Bitcoin should be banned. (Read this article in mirror.co.uk).
With Bitcoin having now been flagged as the currency used by ISIS, more countries may move in to ban the currency. This could seriously threaten the very existence of Bitcoin.
This does not mean that this is the end of the “Crypto Currency” as a means of digital payment system though for many Bitcoin is a synonym for “Crypto Currency”. But Bitcoin has been tainted to such an extent that most of the Bitcoin holdings might have once passed through an illegitimate transaction and hence carry the tag of “criminality”. Legally, Bitcoin being a commodity, a “Stock once tainted remains always tainted”. Hence a majority of Bitcoins (unless they have been mined by the holder or a known source) will be considered as illegal even if the holder has bought it with his hard earned taxed and declared income. It is difficult therefore to see a recovery of the value of Bitcoins in the near future.
In the meantime, Anonymous Hacker group has vowed to take the war into the ISIS camps and is trying to identify the Bitcoin wallets owned by ISIS. It would be in the interest of the Bitcoin community if ISIS holdings of Bitcoins can be identified and disabled so that the ISIS taint can be removed to some extent.
It is therefore advisable for all genuine holders of Bitcoin who are holding Bitcoin as an investment to immediately exit and cut their losses. The value is expected to drop further in the next few days and it will be a long time before it recovers if it recovers at all.
Naavi
True, Bitcoin or any other crypto-currency can be misused by criminals to trade illegal stuff like drugs, hit men in the underbelly of the Internet. But even the real legitimate currency like the US Dollar is being used by criminals to do illegal stuff. New crypto-currencies are likely to emerge in the virtual world which can be a challenge. One has to remember that there are many good netizens using Bitoins for legitimate purposes too. Millions of Bitcoins were reported to be stolen from the alleged silk road founder’s laptop by the FBI agents. What’s happening to these bitcoins is a million dollar question. Ross Ulbricht seem to know how much Bitoins are missing.