If you’re not sure what to do about Bitcoin or other crypto currencies, you’re not alone.
Even the biggest minds in the business are stumped some countries are doing something about this puzzle: shutting it down for now!
A puzzle with missing pieces
According to Reuters, Trusts controlled by Rafferty Asset Management LLC and Exchange Traded Concepts LLC each canceled plans to launch three bitcoin funds that could be traded by retail investors as easily as stocks.
This came on the heals of concerns by US governing body the Securities and Exchange Commission about liquidity and valuation of futures contracts, curently taking place on the CME and the CBOE exchanges, based on the digital asset.
“The move adds a new hurdle to the bid by Wall Street firms to capitalize on investor interest in cryptocurrencies,” said Reuters on Monday January 8, 2018.
“Regulators have been scrambling to figure out how to deal with this relatively new asset, and no single one has control.”
Reuters said the SEC has authority over funds, while the Commodity Futures Trading Commission (CFTC) governs futures contracts which has been tasked with finding a way to fully evaluate the potential risks that Bitcoin poses to the financial system, especially that it doesn’t need a central authority, such as a bank or government.
China and South Korea go on the crypto offensive
Reuters said that Bitcoin sank on Monday after CoinMarketCap removed prices from South Korean exchanges from its calculations of digital currency rates, resulting in a steep drop in all virtual coins they track, or more than 1300 of them.
Greg Dwyer, head of business development at cryptocurrency derivatives exchange BitMex told Reuters: “By removing that, it looks like the market cap fell by 30% and so people rushed to sell because they’re not sure what’s happening.”
After South Korean financial authorities decided to investigate six local banks that offer virtual currency accounts, CoinMarketCap removed their data from three of the largest South Korean exchanges: Bithumb, Coinone, and Korbit.
Bitcoin fell down 8.73% at $14,766.86, Ripple’s XRP fell more than 30% after hitting an all-time peak of around $3.84, while litecoin slumped as much as 16% to $230.
“News on the regulatory front is dragging down cryptos,” Gabor Gurbacs, director of digital-asset strategy at VanEck Associates Corp, told Bloomberg.
“South Korea’s and China’s tightening is weighing on Bitcoin and in the ICO (Initial Coin Offering) market, things started slowing down, with the SEC cracking down on illegal offerings.”
Ether bucking the trend
Ethereum prices, however, traded 4.7% higher at $1,143.56, according to CNBC.
“Contrary to many digital currencies, ripple has been working with large institutions, giving it an aura of legitimacy and practicality,” said CNBC.
“What you’re seeing with ethereum is exponential increase in the number of projects — there are billions of dollars being poured into the ecosystem right now — maybe 10 times more projects this year than last year, which could easily lead to a doubling, probably a tripling in price by the end of the year,” Ethereum co-creator Steven Nerayoff told CNBC’s “Fast Money.”
“Lower transactional costs are increasing usage of the entire network, and that’s increasing the network effects of it,” he said.