The Upcoming Crypto Renaissance
At the beginning of the month people started to question whether there was a cryptocurrency resurrection as the U.S. Securities and Exchange Commission announced they will begin reviewing 9 rejected Crypto ETFs applications. The SEC will be reviewing proposed rule changes that would allow several regulated exchange operators to list bitcoin ETF products on their trading platforms. The SEC announced their plans to consider bitcoin ETF applications from Direxion, ProShares and GraniteShares — enterprises that sought to list their funds on either NYSE Arca or CBOE BZX. This is not only big news for cryptotrading and exchange-traded funds, but rather for the future of the crypto market. The new amendments from the SEC affect a pair of BTC ETFs that had been submitted by ProShares in conjunction with the New York Stock Exchange (NYSE) ETF exchange NYSE Arca. Basically, this involves bringing cryptocurrency to the biggest market ever known: the New York Stock Exchange.
Besides the latest crypto price fall of last week, cryptocurrency prices have been fluctuating within a reasonably tight range lately. Cryptocurrency’s volatility (statistical measure of the dispersion of returns) has fallen sharply, according to Bloomberg’s data compiled by the United States’ based asset manager Blockforce Capital. As we can see on the following chart, the same happened to Bitcoin’s spread (difference between the bid and the ask price of an asset). This happened not only to Bitcoin but to cryptocurrencies in general terms.
According to Rebecca Harding, a financial journalist and acclaimed author said major financial institutions are waiting to invest in the crypto market. She mentioned that the vast majority of banks are healthily skeptical and curious about crypto. Banks have started to acknowledge the need to invest in the market to keep up with developments in the cryptocurrency and blockchain space, but are currently awaiting the green light from regulators and financial authorities.
Goldman Sachs, Citigroup, and Morgan Stanley, three of the largest investment banks in the US, have already developed a wide range of products including a trusted custodian solution to serve institutional investors in the cryptocurrency market. If a leading market like the US imposes a major change in its regulation to further legitimize the cryptocurrency market, possibly by enabling exchange-traded fund (ETF) for cryptocurrencies, experts believe that more banks will acquire cryptocurrencies as a long-term investment. This is one of the reasons why Fidelity, one of the biggest names in financial services wants to help institutional investors add cryptocurrency assets to their multi-billion dollar portfolios.
All over the world private entities and government institutions are taking further steps in their reliance with cryptocurrencies and its relationship with its citizens. Like the U.S., the European Union’s securities watchdog said on Monday it was examining every ICO project to see whether it should be regulated. The recently elected Australian prime minister has supported his commitment with cryptocurrency and blockchain technology numerous times. Following the rare behavior of Tether, Japan’s GMO Internet Group has announced plans to issue a yen-pegged stablecoin called GMO Japanese Yen. Already in the crypto exchange and mining hardware businesses, the company plans to launch its third crypto enterprise with this stablecoin. Not too far from Japan, Singapore’s financial regulator is willing to lend a hand to cryptocurrency firms having problems setting up local bank accounts. Even Africa is devoted to provide more security to its crypto users by forcing cryptocurrency exchanges to set up securities making them rethink their security to thwart persistent attacks from hackers, a trend that has troubled trading platforms all around the world.
This commitment that the world is showing with cryptocurrency demonstrates that trust hasn’t been lost and an upcoming renaissance of crypto prosperity might be closer than ever. In a way, history is repeating itself. The uptrend from 2014 took the Bitcoin-to-USD exchange rate to as high as $1,200. It then corrected to the downside and brought the price to as low as $103. That marked a 91 percent within just five months. The BTC/USD pair later established a strong demand area between $160 and $200, later going towards $509 in 2015, and $1,173 in 2016. The uptrend extended with more pumps, and by the end of 2017, Bitcoin had surpassed $19,000 to set a new all-time high. The Bitcoin demand during the uptrend between 2014 and 2017 was majorly credited to the launch of thousands of blockchain projects. Eventually, a majority of blockchain projects accumulated a large number of investors’ Bitcoins, but failed to deliver on their development and investment promises. Today, the driving force of cryptocurrency its upcoming institutionalization among nations, major banking institutions and financial markets. The 2018’s crypto price fall was similar to the one in 2014: malicious players crashed the market and once gone, serious players created a stronger demand.
Every cycle defines a bubble comprising of serious and speculative investments. Every time a high is reached, speculative investments leave the market in the hands of serious investments. A reason why the price never crashes to zero, opposite to what many mainstream economists predict for Bitcoin. The digital currency seemingly has finished another bubble cycle. But this time, the investors are more aware and educated than before. It is the same reason 90% of the ICOs launched this year failed to raise adequate funds. Moreover, institutional investments coupled with upcoming regulators are making cryptocurrency a much-acknowledgable market than before. Charts are pointing to a high demand near the bottom — driven by a plethora of investors waiting to jump in at the lowermost prices. Nevertheless, only stricter regulations could be the next major factor behind a slow and stable rally together with upcoming makor projects involving banking institutions and major financial markets, which would bring significant monies into the crypto industry as a whole. As Ran NeuNer said: “Bakkt, TD Ameritrade, Passport Capital, Yale endowment, Fidelity, BlackRock, NYSE, Goldman’s …. you really think they are investing in the space with $200bn in mind? They know it’s very temporary and that over a Trillion is coming soon!”
These major leading steps will bring major opportunities in the future for several innovative blockchain projects such as LOTS, which offers lending, intermediary and wealth management services. As the market cap increases not only new investment opportunities arise, but newer services and resources for wealth management become a necessity.
