Over the last week, Bitcoin price saw most aggressive markdown since 2013, going from $12,000 to $6,000 – a 50% move in 7 days. As of now, the battle is on between the bulls and the bears as the market is trying to find the bottom.
After major banks blocking customers from buying Bitcoin with credit cards and governments cracking down on cryptocurrencies, a Senate hearing on Tuesday on the topic turned out to be a good news for Bitcoin holders.
The Senate Banking Committee heard testimony from the chairman of the Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, and the chairman of the Securities and Exchange Commission (SEC), Jay Clayton, on the potential dangers of digital currencies as investments.
Surprisingly, amid a crackdown on Bitcoin exchanges in China and South Korea, their testimony wasn’t as negative as many cryptocurrency investors had feared. As a result of this, Bitcoin prices rose to $7,650 on Tuesday, after dipping below $6,000 just a day earlier.
“We owe it to this new generation to respect their enthusiasm for virtual currencies, with a thoughtful and balanced response, and not a dismissive one,” Giancarlo said.
“It’s important to remember that if there were no Bitcoin, there would be no distributed ledger technology,” said Giancarlo when asked about the value of Bitcoin’s underlying technology, Blockchain.
Jay Clayton, the chairman of the SEC, was a little less excited about virtual currencies – but he also wasn’t denying their role in a modern financial ecosystem. He said:
“To be clear, I am very optimistic that developments in financial technology will help facilitate capital formation, providing promising investment opportunities for institutional and Main Street investors alike. From a financial regulatory perspective, these developments may enable us to better monitor transactions, holdings and obligations (including credit exposures) and other activities and characteristics of our markets, thereby facilitating our regulatory mission, including, importantly, investor protection.”
“Simply said, we should embrace the pursuit of technological advancement, as well as new and innovative techniques for capital raising, but not at the expense of the principles undermining our well-founded and proven approach to protecting investors and markets,” Clayton concluded.
As for ETS, Clayton did mention that while ETFs in Bitcoin are currently not ready, but that “there will be room in the future.”
Lastly, Senator Warren asked Clayton how they can make ICOs safer. Clayton responded that many ICOs are, in fact, violating existing laws and that ICOs “should pay more attention” because the SEC is going to be investigating these violations further.
The best solution, according to both Giancarlo and Clayton, would be to:
- Educate the masses about Bitcoin and cryptocurrencies
- Use the jurisdiction that they have over the futures markets of Bitcoin to collect data and keep track of the markets so that nobody gets too hurt
- Use taskforce to go after “fraudsters” who are scamming Main Street investors in ICO pyramid schemes, and worthless cryptocurrencies.
In summary, cryptocurrencies will allow growth for the United States the same way that the internet did. Whether this marks the end of the bear market remains to be seen, but for now it seems unlikely that we will see lower lows in the immediate future.
Top Stories from the Crypto World
1. Coinbase to implement Segwit in the next few weeks
Cryptocurrency brokerage firm Coinbase announced that it plans to release support for SegWit “in the next few weeks,” a move that promises to reduce transaction fees for customers and reduce congestion across the entire network.
The long due announcement was made on Twitter, stating that “our engineering team has begun the final testing phase of SegWit for Bitcoin” and that “SegWit-compatible Bitcoin sends/receives will be available for customers in the next few weeks.”
SegWit (or Segregated Witness) was activated on the Bitcoin network via a soft fork last August, most of the wallets started supporting Segwit soon after.
By decreasing the size of transactions, SegWit lowers fees and optimizes the limited space in Bitcoin blocks. However, users only take advantage of this feature if they use SegWit-compatible wallet addresses.
2. Bread Wallet enables international Bitcoin purchases with credit cards
Switzerland-based bitcoin wallet startup Bread unveiled plans to accept international bitcoin purchases via credit card. Bread is boasting features such as “high limits” and same-day delivery for bitcoin purchases, both of which are often missing from cryptocurrency exchanges.
By allowing this service, which is a product of a relationship with Simplex, investors can bypass cryptocurrency exchanges, which incidentally top US banks have taken aim at of late.
While Bread is making it easier for investors to get their hand on Bitcoin, banks are going in the opposite direction. JPMorgan Chase, Bank of America, Citigroup and Lloyd’s in recent days placed a ban on bitcoin purchases via credit card. Cryptocurrency exchanges appear to be tops on banks’ radar for credit card bitcoin purchases.
3. No strong reason to ban cryptocurrencies, says Singapore deputy PM
Following a keen study on cryptocurrencies and their trading by the country’s central bank, Singapore’s deputy prime minister has stressed there is no reason to ban cryptocurrency trading among residents.
Tharman Shanmugaratnam, Singapore’s deputy prime minister and minister in charge of the central bank, was speaking at a parliamentary session yesterday when he fielded questions by three Members of Parliament (MEPs) about any potential ban of cryptocurrency trading in Singapore.
Is “any action…being considered to ban the trading of bitcoin currency or cryptocurrency…?” was one of the questions posed.
“Cryptocurrencies are an experiment,” Singapore’s deputy PM explained, stating their numbers had grown internationally and are currently at a nascent stage. Claiming it was “too early” to state if cryptocurrencies will succeed, the minister who oversees Singapore’s central bank, suggested that the “full implications” of cryptocurrencies will take time to understand if they do succeed in society.