Recent months have been fraught for everyone, but even more so cryptocurrencies. The sector is agog with change and it is likely to endure even more profound changes as regulators around the world use security cracks as a rallying crack for investors and national governments to take a hardliner stance on the chunks of digital gold.
It is the 8th of March 2018, and Bitcoin’s price has been falling all throughout the week with the value of its fellow cryptocurrencies dipping as well. WorldCoinIndex noted that the price of a single bitcoin hit $9,757, a still respectable sum but an 8.6% loss in merely 24 hours.
This even did not occur independently of any real-world implications. Most recently, the Securities and Exchange Commission (SEC) spoke that it would seek to regulate exchanges, and ask them to register with it so that it may regulate them.
Until recently, the cryptomarket has been off limits for everyone form the errant bank to the most heavyweight government body. Things are about to change now. SEC made a statement in which the commission spoke about its future intentions regarding cryptocurrencies, and most importantly, why the commission planned to do the things it had announced:
If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as “exchanges,” which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.
At this point, 10 of the most valuable cryptocurrencies (Bitcoin, Ethereum, Litecoin, and Ripple) lost their values. The only cryptocurrency that made a reverse upswing was Viacoin, which gained around 46%.
Cryptocurrencies have often proved resilient. The latest round of bad news did not upset the trade for long, and all the values are up, and booming.
It is interesting to observe how cryptocurrencies tend to bounce back after they have had a heavy hit. Many investors have divined an end of the bonanza, but these assets have been doing quite well and they are apparently intractable in their desire to stay on top the summits of investors’ interest.
Manipulating the Costs of Bitcoin – Is It Possible?
For a long while now, people have stipulated that individuals who own considerable stockpiles of the cryptocurrency are actually manipulating bitcoin prices. This concern is not without some substance. Estimated 1,000 people now hold 40% of all Bitcoin stock in the world. Bloomberg has predicted that the disparity in prices on some occasions are quite normal and there is an easy explanation why those would occur.
The fortunes of companies are interesting enough. Most recently, Nobuaki Kobayashi, a Tokyo-based attorney and currently helping Mt Gox, a cryptocurrency exchange that went bankrupt back in 2014 because of an acute hacker’s attack, has sold $400 million in bitcoin so far.
Mt. Gox is one of the earliest registered cases in which a crypto exchange has been hacked.
The Latest Instalment in Regulation
There have been other events that have precipitated the strange turn of events for cryptocurrencies and there is no denying those. Most recently, a New York judge has inducted a crypto exchange for fraudulent activity, establishing a precedent.
This move will give teeth to all legislator who have been so far veering on the verge of the crypto abyss, out of fear that they would be unable to bring any culprit to bear. This has so far been a valid concern. The Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo recently spoke in the US Congress, informing Capitol Hill that there was no one regulator in the whole country to genuinely supervise any activities linked to Bitcoin and other cryptocurrencies.
Mr Giancarlo’s account was quite straightforward and honest. He acknowledged the lack of regulation and explained that this could have its implications. In honesty, the United States has not been thinking about regulating cryptocurrencies, but this may be now about to change, with the Congress, SEC, and CFTC looking firmly into the matter.
What could follow from now on is a highly-regulated field that will mandate supervision form a variety of parties. However, it is important to establish regulation that is fair and that does not stifle innovation.
We are at a juncture when the entire world is pushing towards crypto future, one way or another, and even if cryptocurrencies peter out in the process, the practices they have established are quite valuable. From banking to the transfer of personal data, the blockchain may have something to teach us all.