Bitcoin Trades Sideways as Increased Regulation Talk Stall Next Rally: Week in Review Jan 30
As politicians meet at Davos to discuss economic policies, bitcoin investors are eagerly listening for indications of what future bitcoin regulations could possibly look like. This uncertain it has led to the price of bitcoin trading sideways in the past week, with traders langley taking a wait-and-see approach before putting on new directional trades.
Several politicians and notable investors have voiced their opinion about bitcoin regulations in the past seven days. Investment mogul George Soros said at Davos that “Cryptocurrency is a misnomer and is a typical bubble, which is always based on some kind of misunderstanding.” Soros was joined by hedge fund manager and Wall Street veteran Ray Dalio who called bitcoin in an interview with CNBC while at Davos.
The biggest event in crypto this week, however, has been the hack of Japanese cryptocurrency exchange Coincheck, which led to the theft of around half a billion dollars worth of NEM (XEM). Fortunately, for investors, Coincheck announced on its website that it would refund all affected investors.
As a result of the hack, the Japanese Financial Services Agency has issued a rare notice on January 27, requesting all cryptocurrency exchanges to check their security practices.
The altcoin market – like bitcoin – largely traded sideways as well last week. Only Stellar lumens (XLM) stood out making a 30 percent week-on-week gain while most other top 20 altcoins were either up or down five to ten percent.
This week’s contributions have been provided by Akshay Makadiya, Liam Kelly, Priyeshu Garg, Rahul Nambiampurath, and Robert DeVoe.
In what some are calling the biggest theft in all of history, 526 million units of XEM have apparently been stolen from Japanese cryptocurrency exchange Coincheck. The value of the stolen cryptocurrency? Just under half a billion dollars.
Speaking to cryptonews.com, the president of the Nem.io foundation said that the hack was not the result of a flaw in the blockchain itself, but was in fact due to Coincheck incorrectly using or not using their “multi-signature smart contract” which would have greatly increased their security.
With regards to compensations for its customers, a Coincheck official only stated, “We are examining the details of our company’s financial condition. We shall respond by prioritizing the interests of our customers.”
Coincheck has confirmed that it will soon start refunding investors who lost their NEM holding during the cyberheist on January 26, 2018.
In an official communiqué on its website, the troubled exchange apologized for the inconvenience caused to its investors and other stakeholders. It assured that everyone who found themselves at the receiving end of the heist will be compensated in Japanese yen. The refund amount, it added, will be deposited directly in their Coincheck wallet.
According to the company’s own data, the perpetrators of yesterday’s cyber attack got away with 523 million XEM, which was being held by as many as 260,000 investors.
The co-founder of Apple, Steve Wozniak, stated at a Nordic Business Forum meeting recently that he had sold all of his bitcoins.
Tired of all the hype and volatility, he confessed to only ever having made the initial purchase out of curiosity. Wozniak had bought the cryptocurrency when a coin was still selling for $700, saying he “wanted to experiment with it.”
Seated before an attentive audience, Wozniak has clearly been an atypical Bitcoin devotee. Instead of holding onto the investment as the vast majority are doing, the fluctuating fortunes of Bitcoin had tired him.
Robinhood, the popular commission-free stock trading app will soon let users also trade cryptocurrencies with zero transaction fees. On January 26, 2018, the platform first lets users track the prices of top cryptocurrencies by market capitalization, including bitcoin, ripple and several more.
The hugely popular stock trading app announced via its blog, stating that it will now offer a single platform for trading stocks and cryptocurrencies. Another interesting data point explains that the average age of traders at Robinhood is approximated to be 26 years old.
Offering cryptocurrency trading on the zero commission model could give it an upper hand over incumbents such as Coinbase that charges anywhere between 1.5 to four percent as a trading fee.
Russia has signaled that it may soon allow cryptocurrency trading over its stock and commodities exchanges. Anatoly Aksakov, who currently serves as the head of the State Duma’s Financial Market Committee, made these remarks on January 22, 2018. He indicated that the Russian Federation’s Central Bank may allow for the trading of cryptocurrency over the Moscow Stock Exchange.
The Russian policy has come full circle from the strict enforcement and total rejection against the issuance and trading of cryptocurrencies. Instead, the country is now moving towards legalization and eventually, allowing digital currency trading.
Deputy Finance Minister, Alexei Moiseev, had earlier stated that his ministry and the Central Bank would determine the list of stock exchanges permitted to conduct cryptocurrency trading shortly.
According to an even earlier article in Forbes, it was reported that Russian authorities were willing only to allow institutional investors to trade and invest in the new cryptocurrency asset class. They classified ‘altcoin’ and ICO investments as too risky and hence prevented the masses from trading them.
Nordea Bank, one of the most reputed financial institute in Northern Europe, has banned all its 31,000 employees from owning bitcoin and other cryptocurrencies. The giant Northern European Bank did not stop there and is also restricting its employees from learning about the crypto space. The new policy was enacted due to the “unregulated nature” of the crypto market.
The newly imposed policy has forbidden its employees from owning cryptocurrencies due to its near speculative nature, thus making it a risky investment. The Nordic Bank stated, “Given these high risks, and in line with our role in the banking industry to maintain high standards of conduct, Nordea is not supportive of staff investing in cryptocurrencies.”