Bitcoin Bulls Take Charge as BTC Moves Back towards $7,000 Mark: Week in Review Sep 24
The price of bitcoin remained firm over the course of the past week, gaining three percent helping BTC move back up towards the $7,000 mark.
The SEC decided once again to postpone its decision on the approval or disapproval of another Bitcoin ETF as it seeks further feedback on the subject matter before making a decision.
Given that the New York Attorney General’s Office has released a report that found that many U.S.-based cryptocurrency exchanges are not providing adequate security to protect client funds and do not sufficiently prevent and monitor potential market manipulation, it seems unlikely that the SEC will change its mind about approving an ETF anytime soon.
The altcoin market followed bitcoin and leading alternative digital currencies and tokens were all in the green versus last week’s close.
The big outperformer of the week has been XRP whose value more than doubled week-on-week even causing a brief “flippening” when it dethroned ETH as the second largest cryptocurrency by market capitalization on September 21.
XRP’s price rally has been driven by investors’ anticipation of Ripple’s payment platform xRapid’s release and news of partnerships for the blockchain-based payments company.
It seems that the wait for an exchange-traded fund that invests in bitcoin is nowhere near finished, as the SEC seeks additional comments on a listing request.
In the filing, the Securities and Exchange Commission invited more feedback, despite already receiving more than 1,400 comment letters on a proposal to list an ETF from Van Eck Securities Corp.
According to the filing, those who wish to comment have 21 days after the SEC’s order is published in the Federal Register, while rebuttals have 35 days from that date. Bloomberg reported that the SEC was seeking the public’s views on market manipulation, including whether bitcoin is less susceptible to manipulation than other commodities that back exchange-traded products, and the need for more surveillance in the industry.
This delay isn’t the first time ETFs have been shut down. After eight months of review, the SEC rejected the NYSE Arca’s application for two Bitcoin ETFs and the Cboe BZX exchange application for a similar financial tool on August 22, 2018, further clouding the pioneer cryptocurrency’s future listing on major stock exchanges.
In an exhaustive 32-page report published by the New York Attorney General’s office, dated September 18, 2018, found that cryptocurrency exchanges appear to lack basic consumer protection mechanisms and do next to nothing to prevent market manipulation.
The “Virtual Markets Integrity Report” went on to claim that as many as three major cryptocurrency exchanges might be operating in a manner that violates the New York digital-currency regulations, and puts consumer protection in grave jeopardy.
Per the report by Attorney General Barbara Underwood’s office, it has come to light that in many cases, exchanges are “not doing much” to protect the investors. The report states that the crypto industry has yet to implement “serious market surveillance capacities,” in a capacity similar to that of traditional trading exchanges to identify and punish the market wrongdoers.
SEC Commissioner Hester Peirce, also affectionately known in the crypto community as “Crypto Mom,” has once again stepped forward urging the government and regulatory bodies to embrace digital assets.
She argued that the ongoing technological revolution in the realm of financial services is rich in potential and aims at having a long-term positive impact. This optimism is not the first time when Peirce has spoke her mind on the burning issue of crypto regulation, which differs a great deal from the take of some of her colleagues within the broader regulatory apparatus.
The “Crypto Mom” spent a considerable chunk of her speech at a recent fintech conference in San Francisco discussing the fledgling asset class. A closer look at the transcript of her presentation reveals that she mentioned Bitcoin at least a few dozen times.
Peirce was given the title of Crypto Mom after she openly expressed her dissent to the SEC decision to reject Bitcoin ETF proposals from multiple parties.
British lawmakers mentioned on September 19, 2018, that the cryptocurrency market needs urgent regulations. The Government should take action to protect retail investors from volatile prices, technical vulnerabilities, and position U.K. to become a global leader in the cryptocurrency industry, given its position as a financial hub.
According to the Parliament’s Treasury Committee report, the Government’s approach is vague and unclear.
“It’s unsustainable for the Government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting,” said Nicky Morgan, the chair of the Parliament’s Treasury Committee.
“Given the high price volatility, the hacking vulnerability of exchanges and the potential role in money laundering, the Treasury Committee strongly believes that regulation should be introduced.”
Cryptocurrency asset investors are currently not provided much protection from potential risks. There are also no proper mechanisms for consumer redress or compensation. According to Reuters, regulation in the U.K. cryptocurrency market would protect consumers and prevent any illegal uses of cryptocurrencies like money laundering or terror financing.
India is currently witnessing the mass movement of blockchain and cryptocurrency talent, as the regulatory environment toughens within the country. According to an article published by News18 on September 19, 2018, blockchain talent which includes developers, service providers, and blockchain-related companies are moving abroad to cryptocurrency-friendly countries like Thailand, Estonia, and Switzerland.
“There are talented people and companies in India’s blockchain community, but the constant fear of a sudden shutter coming down is forcing them to move out,” said the founder of a cryptocurrency exchange in India who wished to remain anonymous. “Moreover, why not? Business always thrives in a place which is product-friendly.”
The movement of talent is, however, not something new in the country. It occurred with many startups and companies who moved to Singapore and Ireland for startup funding, attractive tax rates, and other reasons. The regulatory clampdown is indeed expediting this process. A few cryptocurrency exchange owners have also spoken to News18, mentioning that they have almost finished locating just outside the country.
Outspoken Litecoin creator, Charlie Lee, went to Twitter to make a case for why he believes that competitors are suppressing the price of Litecoin (LTC), opponents and those who are shorting “his” digital currency on September 19, 2018.
Charlie Lee stated on Twitter that there has been “a concerted effort” by individuals and funds to push the price of LTC down as they see Litecoin as a threat. As a response, Lee attempted to explain why Litecoin still has tremendous value.
In an eleven-part tweet thread, Lee pointed out the FUD that has surrounded the Litecoin project recently and wanted to clear up these untruths.
If a recent interview from a Duke professor is something to go by, the U.S. national fiat currency could soon be replaced by a national cryptocurrency. Per a report published by The Chronicle, dated September 19, 2018, Duke Fuqua School of Business’ professor, Campbell Harvey, not only believes that the United States should create a national cryptocurrency, but concludes that paper-based currency’s demise is pretty much inevitable.
In an interview with CBS News, Harvey shared his thoughts on the idea of a national cryptocurrency, saying that it would resolve a majority of the problems faced by the paper-based currency – including tax evasion, black-market sales, and replacing worn banknotes to crimes like counterfeiting.
Harvey cited the example of the Scandinavian country Sweden, where less than two percent of monetary transactions are carried out in cash. Similarly, the Chinese economy has also been a pioneer in transitioning from a cash-based economy to a digital economy, as it transferred $13.7 trillion on mobile devices in 2017.