Another Dark Red Week for Cryptocurrency Markets Ahead of G20 Meeting: Week in Review Mar. 19
Following the previous week’s decline in the price of bitcoin and other cryptocurrencies, we witnessed much of the same in the past seven days. Bitcoin declined by 12 percent week-on-week, while several of the top altcoins – such as Cardano (ADA), EOS, and Monero (XMR) – lost over 25 percent in value.
While there were no significant market-moving announcements last week, the market has been defensive due to the G20 meetings that are taking place this week in Buenos Aires, Argentina. Two discussions on the topic of cryptocurrencies and blockchain technology are planned for the G20 meeting, which will be held on March 19-20. These meetings will give a clear indication of where the market will move next.
If the new “global regulatory framework” that has been hinted at by several lawmakers will turn out to be more crypto-friendly than unfriendly, we can except a substantial rally in the coming days. If new proposed regulations are harsher than expected, we will likely witness a further retraction of the cryptocurrency market and likely a new six-month low for the price of bitcoin.
As bitcoin’s falling prices makes for a negatively fueled mainstream media headline, the market’s top fund managers are not fazed. Instead, they believe the market is still in an uptrend and is poised to keep increasing.
Tom Lee of Fundstrat Global Advisors, a Wall Street fund which has been historically bullish on bitcoin, strongly believes that the digital currency is still in a bull phase. In a note to clients, Lee was bullish on bitcoin even after a 70 percent fall from its all-time high in December 2017.
Lee compared the 70 percent decline to that of mid-2013, a retreat that was followed by a 700-plus day rally of more than 55,000 percent. He believes the price of bitcoin is pegged at $91,000 by 2020.
U.S.-based cryptocurrency exchange Bittrex has announced it will delist 82 tokens with poor liquidity on its platform. The Bittrex team has said that with effect starting on March 30, 2018, cryptocurrencies like BITS, BITZ, CRBIT, CRYPT and 78 other cryptos will cease to exist on its trading platform.
The team urged holders of the affected coins to withdraw their digital assets to other wallets before the set date as failure to do so would lead to total forfeiture of the altcoins.
“We will be removing the wallets included in the list below on March 30, 2018. Once these wallets are removed, we will no longer be able to recover these coins. Users must withdraw their coins before March 30, 2018, in order to keep them,” the notice stated.
What was supposed to be a Congressional Hearing on Cryptocurrencies and the ICO Markets soon turned into an absolute cryptocurrency bashing exercise. Some statements alluded to the fraudulent nature of ICOs as well as unintentional Freudian slips that offer an insight into the potential sentiments behind the attack on cryptos.
At the forefront of the crypto, bashing was Rep. Brad Sherman, a Democratic Congressman representing California. Speaking during the hearing on Wednesday, March 14, 2018, he said that cryptocurrencies were a “crock” (utter nonsense). He also challenged the social benefits of cryptocurrencies declaring that they have none whatsoever.
The U.S. Securities Exchange Commission (SEC) has a new issue to worry about in its fight to regulate cryptocurrencies. The SEC is now looking into business practices of several funds which were set up to invest in cryptocurrencies and initial coin offerings.
The SEC has been requesting to cryptocurrency-related funds to explain how they price digital investments and what set of rules they follow in order to comply with regulation and keep the customers’ investments safe.
The commission also mentioned that some of these companies might be trying to escape the law by not registering with the SEC. According to Bloomberg, the SEC’s Enforcement Division, which investigates companies for potential misconduct and applies penalties to companies not complying, sent subpoenas to a few firms.
The regulatory body also wants to find out whether these funds are adhering to rules regarding holding assets with qualified custodians, usually banks or brokerages, as a way to prevent misappropriation. Digital tokens, which are normally held in virtual wallets is a specific concern, as they are subject to hacks. The SEC has also been probing the relationships between hedge funds and the companies they have invested in.
On March 9, 2018, Mariya Gabriel, a Bulgarian politician released a statement on behalf of the European Commission raising concerns about the growing electricity consumption required to mine cryptocurrencies.
Although two-thirds of cryptocurrency mining occurs in China, cryptocurrency mining is also present within the EU. Cryptocurrency mining is however not an illegal activity.
As long as the means of energy consumption abide by the law, the Commission has no legal basis to ban or limit the activity. Since it’s wholly legitimate and few parties have stepped out of legislative boundaries, the Commission has not yet tracked the number of cryptocurrency miners in the EU.
That being said the European Commission will continuously review its impact on energy demand and consumption moving forward.
Lightning Labs, a team of expert developers focused on making the Lightning Network dream a reality has achieved massive success by releasing the beta version of their highly anticipated Lightning Network Daemon (LND).
Lightning Labs have announced the beta release of their groundbreaking Lightning Network Daemon (LND) after over 12 months of hard work.
The LND is software that makes it easier for developers to access the Lightning Network. As per the team, LND is the first of all its implementations of the Lightning to advance into its beta stages; but one good thing about all significant implementations is that they are compatible with each other.
“This release is a step forward for the network itself. What I mean by that is: Before all the apps, we need to build a healthy network that has liquidity, reliability, high-uptime nodes, healthy channels, etc. We need to onboard an entire industry onto a new layer and build a healthy topology. This release kinda marks the ‘start’ so to speak.”
The G20 heads again on March 19, 2018, and one of the leading topics up for discussion will naturally be related to cryptocurrencies. In particular, Japan is urging their fellow G20 members to universally speed up their attempts to stop digital currencies as a tool for money laundering.
Japan fears that if nations have looser regulations than their counterparts, there will be a loophole for money launderers to exploit.
The Asian country has already adopted a system for overseeing their cryptocurrency sector, thus making the first country in the globe to do so. There is also a joint proposal from Germany and France in relation to bitcoin cryptocurrency market regulation. The Japanese propose regulations to stop illicit activities and improve consumer protection, at the same time promoting innovation in the fintech and crypto sectors.