Crypto Recap Feb 5: Crypto Depression Sets In, US Regulators to Testify

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Top Crypto Headlines

• HOT! PayPal’s Loss Is Bitcoin’s Gain. Bitcoin Maybe Coming to eBay
• HOT! Indian Government Plans to Regulate Cryptos by Fiscal Year-End
• HOT! Ledger Addresses Man in the Middle Attacks
• HOT! CFTC and SEC Release Testimonies Ahead of Feb 6 Hearing
• HOT! SEC’s Clayton to Focus on Crypto Exchange Regulation in Testimony
• HOT! CFTC’s Giancarlo to Point out Benefits of DLT
• HOT! Canada’s Major Banks to Allow Use of Credit Cards in Cryptos
• HOT! Scam Alert: Monero Gold
• HOT! South Korean FinMin: Cryptos Are Necessary for Blockchain
• HOT! China to Block Access to Foreign Crypto Exchanges
• China’s Cheetah Mobile Launches Safe Wallet for Bitcoin and Ethereum
• Bitcoin Ban Expands Across Major Credit Cards
• Cardano Roadmap Gets an Update
• Bitcoin ATM Installations Skyrocket
• Italy’s Enel Decides Against Powering Crypto Miners
• Another Major Credit Card Bans Crypto Purchases
• Japan’s Peach Aviation Moves Forward with BTC Payment Plan
• DNV GL Partners up with VeChain to Develop Authentication App
• Bread Wallet Launches International Bitcoin Purchases with Credit Card

Market Summary

At this point in the crypto game, one shouldn’t be surprised at all by the current market volatility. While adrenaline-seeking newbies may be in a state of shock and potentially ready to call it quits, others with more experience in the space are likely undeterred by what is without a doubt a constant and merciless dumping of cryptos across the board. Again, the catalyst behind the current depression? Within a context of clear underlying risks (federal oversight of crypto exchanges, banks banning crypto purchases via credit cards, etc.), the follow-through selling has also a clear component led by a self-fulfilling prophecy originated off market psychology (panic, fear).

There are 5 phases of grief in the market: denial, anger, bargaining, depression, acceptance. At this stage, the market appears to be between anger and bargaining, and fast advancing to develop and mature into a period of depression, which requires some, at times, lengthy consolidation before the actual acceptance to get rid of one’s allocation (think twice). It’s in the last 2 phases that if you are inclined to sell, you will be passing your chips onto stronger hands, what is often referred in capital markets as a transition from weak-handed into strong-handed players (whales, institutions, smart money). The good news is, if one believes in the technology, as markets keep going down, your perception should be of opportunistic times ahead.

By checking the top cryptos assets by market cap — led by Bitcoin -, the current dispirited market conditions saw valuations wrecked havoc by whopping 2 digits in the red, yet again. Popular crypto assets such as ICON, Nano, 0x, Walton. GAS — served to run NEO -, Cindicator or Sia, were down to the tune of 25–30%, with ZCash, Augur, Stellar Lumens, Status, holding its ground with losses of over 10%, which should be considered a good day. Bitcoin broke support at $8k to quickly accelerate towards $7k, closing level in NY at Bitfinex. Ethereum found buyers around $700, while Bitcoin Cash lost the $1k psychological level. In terms of the total market cap, from north of $800 billion in Dec, the market now stands around $325 billion.

What grabbed most attention on Monday was the copy of the prepared remarks to the US Senate on Feb 6 by SEC Chairman Claiton and CFTC Giancarlo. The main takeaway is the emphasis towards more efforts to regulate cryptos. Clayton will say: “As CFTC Chairman Giancarlo and I stated recently, we are open to exploring with Congress, as well as with our federal and state colleagues, whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate. We also are supportive of regulatory and policy efforts to bring clarity and fairness to this space.”

Meanwhile, the CFTC chairman will make a clear distinction between the agency’s purpose to regulate professional traders, not retail investors. He will reassure the Senate that the CFTC stands by the mandate to protect investors in cryptocurrency derivatives, such as bitcoin futures, but any expansion of its authority into other spot exchanges would require changes in legislation. “Such extension of regulatory authority would be a dramatic expansion of the CFTC’s regulatory mission, which currently does not give the CFTC regulatory authority (distinct from enforcement authority) over cash commodity markets,” Giancarlo will say.

In terms of industry-wide news, we continue to report on inspiring developments. China’s leading international Mobile App company, Cheetah Mobile, announced the release of Safe Wallet to facilitate payments in bitcoin and Ethereum. Also, while still in the phase of speculation, eBay plans to drop PayPal as their main payment option, which opens the door to Bitcoin and other cryptos to play a key role as part of the ecosystem in the future. In South Korea, as part of a request to regulators and banks to work with South Korean Financial Supervisory Commission to better control crypto trading, South Korea’s Minister of Strategy and Finance met with Zhou Xiaochuan, China’s Governor of the People’s Bank of China to discuss this issue.

So much for the Indian FUD as the secretary of the department of economic affairs in India, Subhash Chandra Garg, said that the government will take the required steps to build a framework for cryptocurrency regulation; it only reinforces what we heard from Coinsecure, Unicoin, and Zebpay, India’s three largest crypto exchanges, which confirmed the reports of “Cryptocurrency ban in India” being largely an exaggeration perpetuated by the media, as CoinLive repeatedly reported. Also, out of Canada, the country is testing a blockchain-powered identification system in border security.

IMPORTANT: On the flip side, we learned that Hardware wallet manufacturers Ledger warned their users of a possible man in the middle attack vector. “Ledger wallets generate the displayed receive address using JavaScript code running on the host machine…malware can simply replace the code responsible for generating the receiving address with its own address, causing all future deposits to be sent to the attacker.”

Also, banking heavyweights: JPMorgan Chase & Co., Bank of America Corp., and Citigroup Inc. are a few of the banks taking a hard-line stance on cryptos, not allowing purchases of Bitcoin and other cryptos on their credit cards. Additionally, the South China Morning Post, reported that China is set to block access to onshore and offshore ICOs and exchanges. It was also sad to learn that CoinExchange announced that they halted the Monero Gold markets when they found out “a large number of coins had been created and transferred to the deposit address of a CoinExchange.io user.” A typical “pump and dump” scheme, with developers themselves at the core of the scam.

As per crypto asset-led developments, the Litecoin payment platform LitePay seems to be on track for its February launch, which will make it easier for businesses to accept Litecoin as payment. Qtum announced via their twitter that the “first ever space-based Blockchain node,” made by Qtum has been launched on Zhangheng-1, a Chinese satellite. Cardano released an update of their roadmap; according to the report, Cardano will be released in 5 stages: Byron, Shelley, Goguen, Basho, Voltaire. In NEM, Sadad, a leading fintech company in Bahrain, requested the UAE based NEM team to visit and discuss their interest to work with NEM.

We reported that Bitcoin ATM installations have gone through the roof in recent times, a reflection of growing demand; even more encouraging, according to an article by Murch, multiple BIPs (Bitcoin Improvement Proposals) regarding the integration Schnorr Signatures into the Bitcoin blockchain are in the works. As part of some interesting developments, it has been reported that trading platforms Qryptos, Quoinex, and Liquid, behind the QASH project, are going to be combined into one.

Main Gainers / Losers Top 100 Coins

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