Market Update Feb 5-11: Cryptos Battle Back

We can all agree 2018 has been bleak for cryptocurrency investors, novices and veterans alike.  It seems that speculative negative news and uncertainty around Tether has been at the top of everyone’s media feeds.  While it it has only been slightly over a month of negative returns, that span can feel like an eternity; especially in a realm where traders we’re growing accustomed to 5x returns as the norm.

Last week, the U.S. Senate Committee on Banking, Housing, and Urban Affairs hosted the Chairmen on the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) testify on the legality and nature of the cryptocurrency in our country. The result was surprisingly optimistic, with senators and technology experts alike agreeing to the merits of the underlying technology. The amount of fraud that has taken place in these decentralized (and sometimes untraceable) cryptocurrencies has many worried of the potential for poor investment, but that FUD is exactly what the corporate government and central banks want.  A more appropriate outlook can be drawn from CFTC Chairman Giancarlo when he said in a tweet on Thursday Feb 8th, “As your invest remember: caution, balance, and do your own research”.

With repeated statements made about the need for regulation, it is clear that the government understands that it is hard for them to hold off any longer with accepting the intrusive nature of this rapidly growing sector. Regulation, as discussed before, can mean temporary restraints on capital influx to the cryptocurrency markets (as seen by actions of major banks like J.P. Morgan and Bank of America halting credit card purchases for crypto’s last week).  Banks cut the dip buyers money supply causing price stagnancy and prolonged recessions. For long term hodlers, the picture painted is one of epic optimistic proportions. It appears that the government and big banks are at a tipping point; weighing acceptance of the upcoming disturbance this technology is bringing versus trying to figure out the best way to get a piece of the action before the next bull run. As regulation of exchanges and cut-offs from deposits leave current investors jockeying to minimize their losses, whales of all industries are figuring out how to best position themselves for the reallowance of capital into the crypto-markets. With over $23 trillion in stocks, bonds, cash and gold it is apparent that these ‘cryptocurrencies’ would have to go a long way to become the norm for company funding. Yet with their growing popularity and subsequent potential for regulation and standardization of ICO’s, ‘going public’ may be taking on an entirely new meaning very soon. 

In other news, for those of you that are sitting with capital in cryptocurrencies, most likely you or someone you know has investments being held on Binance. With the looming ‘free-trade’ exchanges on the horizon and the recent news of hacks taking place on the major exchanges, it was crucial for Binance to establish itself as a leading exchange in innovation. After a DDoS attack on their cloud network, it became apparent that security must continue to remain the primary concern of the exchange, even if that meant temporary disabling trading. Considering the currently slumping state of cryptocurrency returns, we’d say it was the perfect time for Binance to undergo a forced upgrade.  We praise Binance for their transparency throughout the upgrade process.  The founders were avidly responding to concerns on social media, even calling out crypto-bull, John McAfee, for inciting FUD of a potential major hack as the reason for the trading halt.  Binance is back online and stronger than ever after weathering this recent storm and looking for new users to join the crypto revolution!