Wow, what a year crypto market has been having so far. Remember how the entire cryptocurrency market cap was about to cross $1 trillion in December? Well, it looks like we’ll need to wait a very long time to get to those levels again.
On Wednesday, defying all expectations, except maybe Vinny Lingham’s (who’d apparently predicted this decline), Bitcoin price dropped by over 10%, bringing the price to as low as $7,899.
All major cryptocurrencies including Ethereum, Bitcoin Cash, Ripple, Cardano, and Litecoin declined in value, at a similar rate as Bitcoin. Ethereum recorded a daily loss of 10%, while Ripple and Bitcoin Cash both decreased by just over 9%.
Analysts have attributed this crash the ICO hearing participated by US representatives and government officials, in which several representatives including Carolyn Maloney, Representative for New York’s 12th congressional district, claimed that the cryptocurrency market is a bubble.
The negative comments of US representatives followed a report released by $81 billion investment firm Allianz, which claimed that Bitcoin has no intrinsic value and therefore, could fall in price. Stefan Hofrichter, Allianz’s global economics, and strategy head, said:
“In our view, its intrinsic value must be zero. A bitcoin is a claim on nobody – in contrast to, for instance, sovereign bonds, equities or paper money – and it does not generate any income stream,”
If that wasn’t enough, Google followed Facebook’s lead in banning cryptocurrency-related advertisements. This sucks for ICOs that rely heavily on marketing, but it’s unlikely to hurt the prospects of the coins backed by strong technical fundamentals.
The combination of all those reasons led the market to bearish pressure. At the time of writing, Bitcoin has slight recovered and is trading at $8,326, representing a market cap of $140 billion with a 42.5% dominance.
The failure of the bulls to first break out of $12,172 and then hold the $9,500 levels is a negative sign. This shows that the bulls are losing strength. It’d be interesting to see how the next two weeks play out for Bitcoin and alts.
If the BTC/USD pair breaks down of $8,800, it can fall to $7,850 and below this, to the February 06 lows of $6,075.04.
Top Stories from the Crypto World
1. Google is banning all crypto, ICO ads from June
Starting from June 2018, Google will ban online advertisements promoting any cryptocurrency-related content as a part of its newly updated financial services policy that introduces curbs on a handful of financial products including contracts for difference (CFDs), rolling spot forex and financial spread betting – all seen as high-risk products.
Furthermore, Google also said aggregator and affiliates using Google ads will no longer be allowed to host promotional material related to cryptocurrencies. In other words, Google is effectively disabling crypto-related advertising on its own website as well as third-party websites using its ad products.
Google’s director of sustainable ads Scott Spencer explained the move as a precautionary measure to safeguard consumers:
“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.’ he said.
2. Gemini calls for crypto exchanges to form self-regulatory body
Cameron and Tyler Winklevoss, the founders of cryptocurrency exchange Gemini have unveiled a proposal that seeks to see US cryptocurrency trading platforms establish a self-regulatory organization (SRO).
The brothers wrote:
“We believe a thoughtful SRO framework that provides a virtual commodity regulatory program for the virtual commodity industry is the next logical step in the maturation of this market. We look forward to engaging with industry leaders, participants, regulators, and legislators on this proposal.”
At present, the Commodity Futures Trading Commission (CFTC) classifies Bitcoin and other cryptocurrencies as commodities, meaning that their cash markets are not subject to CFTC oversight unless fraud or market manipulation occurs.
3. Bitcoin Cash now transacts through SMS text message
Users can now transact BCH using SMS text messages. The project is currently limited to a select few and plans to go public in two weeks.
Needing solely a phone number that can receive text messages, they claim to have devised a method by which you can send and receive your Bitcoin Cash across the world by simple commands such as send x BCH to x address.
The phone number itself becomes the Bitcoin Cash address through complex methods that traverse telecoms and code. Every full phone number (country code + area code + number) is unique to a single mobile device. CoinText leverages each phone number as a unique identifier and puts them through a proprietary algorithm.
The result is used as the seed for a Bitcoin Cash keypair, which is always created on the fly and never stored. This means that every phone number in the world can have a corresponding Bitcoin Cash address that is unique to that number.
This is something that has never existed before. It’d be interesting to see how it works.