It has proven to be a tumultuous year so far for the world’s most recognizable and disruptive cryptocurrency, Bitcoin. The cryptocurrency has lost more than 40% of its value during the first quarter of 2018 alone, after rocketing more than 1,300% in 2017. One of the contributing factors responsible for Bitcoin’s value degradation originates from Google’s recent decision to ban all advertisements for cryptocurrencies and initial coin offerings. This follows a similar move that social media juggernaut Facebook made at the start of the year.
The impact of Google’s ban was felt immediately and drove the price of Bitcoin down by 10%. The price of the world’s most well known cryptocurrency that is traded on the Luxemburg-based Bitmap exchange plummeted to $8,201, its lowest level since February 12, shortly after Google announced its ban. March certainly was a miserable month for Bitcoin, with no respite in sight as it reached its lowest valuation of $6,844.32 on March 30.
Is Google’s Ban Bringing Crypto to its Knees?
It’s not just Bitcoin that has been the hardest hit; Ethereum has similarly suffered its worst first-quarter performance in history. During the first quarter of 2018, Ethereum saw a 47.7% decline in price from $755.76 to $394.65. Ripple, the third most widely traded cryptocurrency amongst the major coins, has been absolutely pummelled at the stock exchange and is down a massive 77% from $2.30 to $0.509565.
While Ripple may be the worst performing cryptocurrency during the first quarter of 2018, it’s the new investors who jumped on the Bitcoin train just three months ago who have seen their assets fall in price from $13,412.44 to its lowest levels of $6,844.32.
Google’s Reasoning Behind The Ban
Google is the latest Internet giant to clamp down on the crypto-sector amid growing concerns about scams and deceptive promotions. Google’s most recent update to its financial services policy will see the ban enforced across all of its AdWord services, which will take effect in June. The ban relates to all advertisements for cryptocurrencies, related content such as initial coin offerings, crypto exchanges and cryptocurrency wallets, as well as advertisements that provide trading advice.
Google announced that it would also prohibit advertisements for financial products such as binary options, rolling spot forex, financial spread betting and contracts for difference. These join the long list of other banned advertising topics such as Payday loans, weapons, explosives, recreational and some pharmaceutical drugs, and tobacco.
Scott Spencer, director of sustainable ads at Google, stated on the company’s official blog, “Improving the ad experience across the web, whether that’s removing harmful ads, will continue to be a top priority for us.”
This announcement follows hot on the heels of Facebook’s January announcement that stated that it would prohibit advertisements promoting cryptocurrency-related financial services and products, as well as initial coin offerings and binary options because of the risk it posed to users. Bitcoin tumbled 12% in late January after Facebook made its announcement.
Google and Facebook are the world’s largest online ad providers and are arguably two of the most powerful Internet companies. With both companies announcing that they will ban advertisements for financial services and products which are regularly associated with deceptive and misleading promotional practices, they are essentially cracking down on advertisements promoting cryptocurrency in response to the growing concern that there is not currently sufficient protection for consumers.
Will Bitcoin Bounce Back?
Bitcoin remains a dynamic, fluctuating and essentially “birthing” market, despite its decade of availability. This leaves it vulnerable to several factors, including announcements like these that have drastic effects on price. In spite of the recent volatility of Bitcoin’s value, many analysts believe that Google’s decision was a positive development that would not dampen demand and could be a good thing for the industry in the long term.