Bitcoin Loses 7 Percent in January and US State of Wyoming Sees Cryptocurrencies as Money
The first month of 2019 is done and dusted but the bear market rout does not seem to be coming to an end anytime soon. Bitcoin is in the red for the sixth consecutive month after tumbling 7.6 percent in January. Over the past six months, the world’s most valuable digital asset has lost 55 percent of its value.
The damage was mostly done in the early parts of this week when Bitcoin fell by 4 percent on Monday to reach new lows in as much as six weeks. The downturn broke key resistance level and could see Bitcoin tumbling again.
The sudden sell-off had a severe effect on the overall market and caused the market cap to reach a low of $111 billion. Other digital assets to suffer from the price carnage include Ether, Bitcoin Cash, Stellar, and Bitcoin SV.
Wyoming recognizes cryptocurrencies as money
The US state of Wyoming has passed a bill on Jan. 31 that recognizes cryptocurrencies as money. This paves the way for other states and countries to follow suit in regulating cryptocurrencies. The new bill will go into effect on Mar. 1.
The bill classifies digital asset in three categories – digital consumer assets, digital securities, and virtual currencies.
A digital asset that falls into the above-mentioned categories is deemed to be an intangible personal property which grants virtual currencies the right to be treated as fiat currency.
“Virtual currency is intangible personal property and shall be considered money,” reads an excerpt of the bill. The bill allows banks to offer custodial services for digital assets.
The battle of the CEOs: Ripple’s Garlinghouse vs. SWIFT’s Leibbrandt
The Paris Fintech Forum provided the platform for the match-up between Ripple’s CEO Brad Garlinghouse and SWIFT’s CEO Gottfried Leibbrandt. The discussion between the two had been long-time coming because Ripple is the blockchain competitor to SWIFT’s dominance in the global payments sector.
The two were pitted against each other at a panel called “Let’s Send the Money” and moderated by CNBC’s technology correspondent Elizabeth Schulze. The discussion was centered around the future of cross-border payments.
The discussion kicked off with Schulze asking Leibbrandt why SWIFT could argue that it is the future of global payments.
The CEO started by highlighting that they have a global network of 10,000 banks which he believes is a resilient system. He said that cross-border payments have improved and mentioned the technology that the firm introduced three years ago.
“The big innovation we introduced three years ago called GPI, Global Payments Innovation, which really takes correspondent banking into the 21st century. Essentially, we introduced a unique identifier for each payment so you can now track your payments all the way through,” said Leibbrandt.
SWIFT’s CEO talked about the company’s key features that include faster transactions, deep liquidity, and backward compatibility.
Garlinghouse acknowledged that SWIFT’s GPI is a major step ahead but is not the best solution. He said that banks need to be innovative in order to remain in the picture. He added that SWIFT is not a liquidity provider but a messaging framework.
Cardano venture arm Emurgo leads investment round in digital merchant bank Y2X
The venture arm of the Cardano project EMURGO announced through a press release on Jan. 31 that it had led an investment round in the digital merchant bank Y2X. The financial details of the investment are yet to be revealed.
This strategic partnership underscores Emurgo’s mission and vision of fostering the adoption of Cardano through strategic investments in companies whose interests align with those of the Cardano ecosystem.
The partnership naturally leads to business partnerships between the two parties. Y2X is going to use Cardano as its blockchain of choice when it develops its products.
“We are delighted to lead this funding round and foster closer cooperation with Y2X. We look forward to providing multiple solutions within the Cardano ecosystem to help Y2X and its partners to boost their growth, further secure their operations and optimize their processes,” said EMURGO’s Chief Investment Officer (CIO) Manmeet Singh.
Y2X is a digital merchant bank that helps entrepreneurs and firms raise capital through several means including Security Token Offerings (STOs). EMURGO is planning to make more investments throughout the year in a bid to drive the adoption of Cardano.
“The Blockchain is unleashing peer-to-peer engagement and creativity, propelling an explosive force that will drive innovation for entrepreneurs and technologists. Our partnership with EMURGO and Cardano will enable us to bring those innovative forces together to bear more effectively as we invest in and incubate new companies,” said Y2X co-founder David Shuler.
Stay away from Tron: ChaChing wallet CEO told by SEC informant
ChaChing Wallet CEO Thomas Schulz tweeted on Jan. 29 that he has been told by a U.S. Securities and Exchange Commission (SEC) insider to stay away from Tron (TRX). There is no way to tell if this tweet has an element of truth, but it has the twitter community talking.
“Just heard from [an] SEC insider. Literally, his first comment was: Stay away from Tron. I’m not kidding,” tweeted Schulz.
At the moment, the tweet can be regarded as a rumor as the SEC has not yet released an official statement concerning the matter.
A cryptocurrency is considered to be a security by the SEC if it was issued by a centralized entity and investors bought the tokens with the aim of realizing a profit. According to SEC, a crypto project ceases to be a security if it achieves a high level of decentralization, as Ethereum has done.
Tron is led by Justin Sun who is known for using hype to market his blockchain company. Moreover, he is known for taking a swipe at Ethereum every time he gets half-a-chance to do so.
Despite the market downturn, Tron is one of the best performing digital assets so far this year. TRX was trading at $0.018 on Jan. 1 but has surged to $0.026 on Feb. 1.
The increase in prices is fueled in part by the fact that the Tron blockchain ecosystem is seeing an increase in the number of Dapps and smart contracts. Its case has also been helped by Ethereum’s failure to implement its Constantinople hard fork upgrade.
Veteran crypto analyst: Dark days ahead
There is a big difference between the predictions given between the start of last year and this year. Last year began with wild and over-ambitious predictions that left many analysts wondering what had happened to their prediction tools.
2019 has seen more cautious predictions and analysts are suggesting that this year will be boring, characterize with fewer price swings, and maybe further price drops.
The latest ‘veteran crypto analyst’ to predict another bumpy ride is Craig Erlam, a senior market analyst at Oanda, a London-based consulting firm. He thinks that it is possible that dark days may be on the cards.
Speaking to MarketWatch on Jan. 31, he said, “Bitcoin appears to have stabilized again following a couple of volatile months that saw it once again come under pressure.”
He said that the downward price movements are pointing to further price declines for Bitcoin and altcoins.
Erlam noted that the current momentum favors the ongoing bear market. However, he said that if Bitcoin manages to break the $4,500 level, it has the potential to rally to $6,000.
Apparently, there are many who share Erlam’s sentiments.
Allianz Global Investors CEO takes a familiar swipe at Bitcoin
There is a big difference between market analysts who predict a downturn and Bitcoin critics who do not want to see Bitcoin succeed and would go to great lengths to convince anyone who cares to listen to them.
Andreas Utermann, the CEO of Allianz Global Investors, an investment firm has more than on one occasion thrown cold water on Bitcoin and its potential as an investment asset.
In a LinkedIn article published Jan. 30, Utermann said that he is still surprised that regulators have not yet cracked down and possibly banned digital assets.
He alluded that Bitcoin was created after the 2008 financial crisis and this is the reason why the digital asset is seen as an alternative currency that appeals to “libertarians and cyber-utopians.”
He further claimed that cryptocurrencies lack the key features of fiat currency such as the backing of an army, the ability to pay interest, etc.
Utermann said that cryptocurrencies are not even an asset class and should not be referred to as currencies.
“As an asset, a cryptocurrency is a claim on nobody – in contrast to sovereign bonds, equities or paper money – and it does not generate an income stream. (Admittedly, one could make the same argument about gold, but gold has been widely accepted by humankind as a thing of value for more than two-and-a-half thousand years – compared to less than a decade for Bitcoin),” wrote Utermann.
Bitcoin programmer: regulating Bitcoin is not the price, but a distraction
Bitcoin was introduced in 2009 as a white paper distributed by a mysterious Satoshi Nakamoto to a cypherpunk community. Its cause has been spearheaded by anarchists, decentralists, libertarians, and those questioning the credibility of legacy systems.
In contrast to its roots, the crypto community has been working hard to get approval from governments and regulators. At the same time, the people have been trying to lure Wall Street investors to the young market, in the belief that it will drive adoption and result in a bull run last seen in 2017.
However, there are some that believe Bitcoin has lost its vision – the one that the unknown Nakamoto had in mind.
The founder of Corgan Labs and crypto programmer who contributes to the Bitcoin Core Client, Jonathan Corgan released a series of tweets claiming that the push for regulation is irrational.
“Every time we try to appease “regulators” and shoehorn Bitcoin-related enterprises into existing politician-enforced structures, we’re actually sanctioning and enabling those politicians to do further harm, and taking our eyes off the real goal,” tweeted Corgan on Jan. 31.
Corgan pointed that the obvious selling points of Bitcoin thus far: decentralization, borderless, and free from interference from third parties.
A lot has changed since Bitcoin was introduced to mankind. While it was initially designed to be a payment method, it has become more of an investment asset. The Bitcoin network supports around 7 transactions per second. This is outperformed by its use as a store of value, although it is also famous for being highly volatile.
NEM Foundation: the real victim of the crypto winter
The crypto winter has seen many small to medium companies shutting down their services. Large companies have significantly reduced their headcount. And many thought they had seen (or heard) it all.
It now appears that the NEM Foundation could be the next big victim of the market downturn due to dwindling cash reserves.
NEM was one of the promising projects. It was announced a few months ago that Ukraine would be using NEM’s blockchain to fight electoral fraud. NEM was touted by many to be an Ethereum Killer but that may never happen.
The NEM Foundation wrote a letter to the community and openly said that things are going south as they are only left with funding enough to last only a month.
The letter stated that they raised a significant amount of money to finance their projects but this was negated by a high burn rate.
“When the new council arrived on January 1, 2019, we opened the books and saw the results of 2018. We saw a lot of talented people who were working hard, but not aligned with the same goals. The efforts being duplicated, and inconsistent metrics of success. We also saw very little accountability for funds and questionable ROI, leading to a burn rate of 9 million XEM per month,” reads an excerpt of the letter.
The letter says that the reality on the grounds forces the foundation to put everything on hold as they do not have enough money to support their partnerships, staff, and projects.
In overall, this is bad news for the entire crypto market. Only a month will tell what the fate of the foundation will be.