“The blockchain is real. You can have crypto yen and dollars and stuff like that,” said the 61-year-old CEO of JPMorgan, Jamie Dimon, on Tuesday – an expression of his “regret” at calling Bitcoin a fraud last September. Since those comments, which many perceived as damaging to the prospects of the leading cryptocurrency, Bitcoin has more than tripled in value.
However, Bitcoin’s upward trend has been distinctly muted this year. Although it shot up briefly towards the $17,000 mark earlier this week, it has fallen back to the $15,000 region and continues to trade sideways. The overall cryptocurrency market, as usual, has trended in line with Bitcoin’s own price swings and reached an all-time high of $850bn before falling to the $750bn region.
Ripple has been one of the biggest stories of the year so far. Indeed, many mainstream media outlets have christened it the “new Bitcoin” or the “Bitcoin killer”, revealing that their journalists might not appreciate that Ripple’s XRP was initially released in 2012 and that it has been in free fall this week (albeit from recent extraordinary highs). It is currently trading around 50% less than last week at the $1.90 level.
The past seven days have been a blessing for Ethereum maximalists – those who believe that it will dominate Web 3.0. Ethereum shot past the $1000 milestone and posted a new all-time high above $1400 yesterday. Some pundits predict that ether still has a way to go, and feel that Ethereum could easily triple in value this year. After losing the number two spot to Ripple last week, Ethereum has retaken its former position and piled on a roughly $40bn lead on its challenger.
The so-called Chinese Ethereum, NEO, has also performed exceptionally well. Following more talk from the Chinese government about banning Bitcoin altogether, the Chinese cryptocurrency has shot up in value. In the last two days alone it has piled on around 25% in value to reach a new high of $125, up from a mere $30 a few weeks ago.
Overall, however, the cryptocurrency market appears bearish. Many altcoins that rallied as much as 1000% since November are taking a hammering, lending ammunition to those who believe the entire crypto ecosystem is no more than hot air. TRON has shed around 25%, while Cardano and Stellar Lumens have each lost about 15% in the last 24 hours.
Regardless, Bitcoin bull and Wall Street trader Mike Novogratz has announced that he is starting a merchant bank dedicated to blockchain-based initiatives. The new bank, Galaxy Digital Holdings, will be funded primarily from Novogratz’s own crypto holdings, stakes in blockchain companies and ICO tokens, which are rumoured to be worth around $400m. The firm will engage in trading, advisory and asset management; but will it live up Novogratzs’ dream of being the Goldman Sachs of the crypto world?
Time will surely tell.
Cryptos Rally Slightly
Following one of the worst crypto crashes since 2015, cryptocurrencies posted moderate recoveries.
Editor’s Remarks: Bitcoin dipped into four-figure territory at the nadir of the short-lived crash that many touted as the “end of cryptocurrencies”. However, most major currencies were up yesterday as they commenced a recovery. Ripple, which fell as low as $0.90, was up to $1.40 by midday, while NEO resumed its upward trend. Bitcoin’s recovery has been notably weaker than its smaller cousins, some of whom are up 60% in the last 24 hours against bitcoin. Ethereum gained back some of the ground it lost too and is settling in once more above the $1,000 mark.
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Crypto Carnage: Blood on the Dance Floor
It is said that ‘Blue Monday’, typically the third Monday of January, is the most depressing day of the year. This has, undoubtedly, been the case for cryptocurrency owners worldwide; from Monday onwards, almost all of the world’s major cryptocurrencies have seen a drastic slump in their prices.
Having reached the $14,000 mark last week, Monday onwards marked a severe fall in Bitcoin’s value. On Wednesday, the dubbed ‘king of cryptocurrencies’ dropped to below $10,000 for the first time since the end of November, before making a small recovery on Thursday. It stands at $11,500 at the time of writing, but the day is still young.
And Bitcoin has only been leading the way. At this point last week, the price of Ethereum, the second most valuable cryptocurrency, was approximately $1,200; a slump on Monday saw it fall to a low of $800 on Wednesday before pushing through the $1,000 threshold again, and reaching $1,030 a day later.
Ripple’s XRP also followed suit; the cryptocurrency has almost halved in value over the past week – from around the $2 mark to a low of $1.20 on Tuesday. Since then, it has marginally recovered in price, to $1.48 at the time of writing.
Monero, IOTA and Cardano were also impacted – since Monday, they have declined in price by 35%, 22% and 21%, respectively. Litecoin now sits at $195, down from $240 at the beginning of the week.
The crash occurred at a time of optimism and hope for cryptocurrency owners. Just earlier this week, US money transfer company MoneyGram announced a partnership with Ripple in the aim of streamlining money transfers. Yesterday also marked the expiration of the first Bitcoin futures contract that had been listed by the CBOE.
Still, China’s offensive rhetoric against Bitcoin and other cryptocurrencies in the last seven days is likely to have stoked fears amongst investors, causing a major sell-off. The country confirmed earlier this week that it was seeking to further clamp down on its restrictions against virtual currencies by eliminating cryptocurrency trading.
It has also recently announced plans to further restrict Bitcoin mining within the country. Recent statements coming from Chinese governmental circles could go as far as to suggest that China wants to eliminate cryptocurrencies outright: the People’s Bank of China (PBoC) vice governor, Pan Gongsheng, purportedly encouraged the state to introduce a total ban on cryptocurrencies.
China is by no means the only country to have espoused hostility toward cryptocurrencies. Russia also partially echoed China’s scepticism – President Vladimir Putin noted this week that “in broad terms, legislative regulation will be definitely required in future”.
South Korea’s unreceptive stance toward digital coins – it was reported earlier this week that its finance minister, Kim Dong-yeon, had stated that the government would be introducing measures to clamp down on the “irrational” cryptocurrency investment rage – may have also played a part in driving prices down.
Still, for every bear, there seems to be a bull. Time shall tell whether increasing restrictions on cryptocurrencies from different governments will further impinge on their price, or if they will find a way to adapt to the new obstacles and prove all those championing them (and making millions in the process) right.
UK Banks Shun Bitcoin
No UK banks have partnered with cryptocurrency exchanges.
Editor’s Remarks: The lack of any relationships between UK banks and cryptocurrency exchanges means that UK investors currently have to move their money through a series of foreign exchange transactions and services before they can cash out their profits. As a result, they incur high fees and often the suspicion of their banks. This is contrary to many European banks, which have partnered with such exchanges. To an extent, this is because the UK retail banking sector is highly concentrated, whereas in Europe and the US the consumer has more options. The UK government is also due to release guidance on how cryptocurrency gains are to be taxed in the next few days.
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