Optimistic Week Ahead as Bitcoin Mildly Promises to Exit the Bear Market
The last week surge re-ignited hope that the crypto market is not down and out yet. Bitcoin may not be seeing huge spikes at the moment, but there is a general feeling that the crypto markets are resurrecting from the current bear market.
Bitcoin has lost 0.19 percent in the last 24 hours while Ether surged 2.38 percent. Ether has managed to surge pat XRP and is now the second largest digital asset by market capitalization, a position which it has previously held for a long time.
EOS and Binance Coin are the other digital assets in the top 10 list in the green. The market is not yet out of the woods, but recent activities are encouraging.
Bitcoin moving towards exiting the bear market
The chief executive of one of the largest financial advisory firms in the world believes that Bitcoin is finally coming out of the bear market.
Nigel Green, the CEO of deVere Group commented after the surge of Bitcoin in the past week. Bitcoin spiked from around $3,400 and briefly traded above $3,700 before retreating to lower than $3,700. The world’s largest cryptocurrency rose 10 percent within 24 hours and went past $3,700 for the first time in three weeks.
Green admitted that it was a sudden jump but a welcome one for those holding Bitcoin. However, he warned that it is too early to call a party.
“It was a relatively sudden jump, and, of course, positive news for those currently holding Bitcoin,” said Green.
He indicated that there are three reasons that are key in driving the price of Bitcoin. He mentioned the leaked interview in which a U.S Securities and Exchange Commission (SEC) said the approval of a Bitcoin ETF is inevitable.
The second reason, according to Green, is the development of the Lightning Network that will address Bitcoin’s long-standing scalability issues. This will pave the way for the mass adoption of Bitcoin and other cryptocurrencies.
Thirdly, Bitcoin halving set to take place in 2020 could possibly help Bitcoin’s price to recover.
“The code for mining Bitcoin halves around every four years and the next one is set for May 2020. When the code halves, miners receive 50 percent fewer coins every few minutes. History shows that there is typically a considerable Bitcoin surge resulting from halving events,” said Green.
Spain’s central bank warns citizens of risks involved in dealing with cryptos
Not every country is as receptive to cryptocurrencies as countries such as Malta or Switzerland. Spain is one of Europe’s countries still trying to navigate its way around the cryptocurrencies.
The Central Bank of Spain issued a warning to its citizens against involving themselves in transacting unregulated digital assets. The notice, issued on Feb. 10, followed an earlier notice in which the bank outlined the legality of the emerging market in the country and the European Union (EU).
The two documents underscore the fact that the European country has not yet passed any legislation regarding cryptocurrencies, exchanges, and other companies involved in the sector.
The central bank warned the citizens that using cryptocurrencies for purchasing goods and services leaves them in a position in which they cannot claim their rights should anything go wrong.
The governor of the bank has said cryptocurrencies should be referred to as virtual currency or crypto assets.
This is another indication that cryptocurrencies still have hurdles to pass through before they can be adopted in major countries in the world.
The SEC to provide further clarity on security laws and token sale
The SEC is clarifying its positions on securities laws and how it applies to cryptocurrencies.
Hester Peirce, a Commissioner with the SEC delivered a speech at the University of Missouri School of Law in which he stated that the regulatory agency is preparing a ‘supplementary guide’ for startups and companies planning to launch initial coin offerings (ICOs).
Peirce, who has a history of being friendly towards crypto projects, said that the amended guidance will clarify whether new fundraising projects fall under securities laws or not.
Although there is the Howey Test – a U.S standard used to determine whether an asset is a security or not – Peirce noted that there is a need to regard the new asset class differently because it may be structured differently from traditional securities.
There is a need for regulatory agencies to treat cryptocurrencies in their own respect rather than bundling them with traditional asset classes.
The SEC director for cooperation finance William Hinman acknowledged in November last year that more clarity is needed for classifying digital assets.
Peirce noted that regulation is good for the industry.
“If we act appropriately, we can enable innovation on this new frontier to proceed without compromising the objectives of our securities laws – protecting investors, facilitating capital formation, and ensuring fair, orderly, and efficient markets,” she said.