Monat: Dezember 2021

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Crypto to start behaving like tech stocks, says crypto analyst

  • The total cryptocurrency market cap has shed over 3.2% in the past 24 hours as widespread selling in the crypto sector mirrors downsides in the equities market.

Crypto analyst Lark Davis says the cryptocurrency market is maturing and could soon post price moves that show volatility ratios similar to that seen in tech stocks.

According to the analyst, the first phase involves a lot of volatility before a maturing market sees that gradually reduce amid consistent growth.

Commenting on the current price action across major cryptocurrencies, Davis said:

“The #crypto market is going to start behaving like tech stocks. Lots of early volatility, then we start to see basically up only (with turbulence) as the user bases continue to grow.”

He looks at a scenario where an asset like Bitcoin experiences major price corrections today not being different from leading tech stocks like Amazon Inc., (NASDAQ: AMZN).

“For reference Amazon hasn’t seen any drawdowns over 40% since 2011!!!! Crypto is maturing,” he tweeted.

Bitcoin has declined by about 3% on the daily timeframe and there are also losses on the day for most other digital assets. Ethereum, Binance Coin, Cardano and Solana are among the major losers in the top ten cryptocurrencies by market cap, while there are declines for Avalanche, Polkadot, and Dogecoin.

This scenario is largely replicated in the stock market, where the Dow Jones, S&P 500, and Nasdaq closed lower on Friday. Blue-chip stocks such as Apple, Google, and Microsoft have all slipped over the past few days amid broader concerns over Covid-19 and its impact on economic recovery plans.

BTC’s largest price crashes

Bitcoin, which rose to highs of $69,000 in November, has lost over 33% of its value in the past month. The retreat sees BTC trade at lows of $45,000 as of writing. However, this is not the biggest dump for the flagship cryptocurrency. In the past decade, the BTC price has shrunk more than 80% on three occasions and 50%+ on four.

The biggest crashes saw BTC tank 99% in 2011 and 84% in 2013- both corrections linked to the now-defunct Mt.Gox Bitcoin exchange. The latest dump is a 53% crash in May following China’s crackdown on crypto mining.

The post Crypto to start behaving like tech stocks, says crypto analyst appeared first on Coin Journal.

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BIS Exec Benoît Cœuré says global crypto regulation likely in 2022

  • Benoît Cœuré told Financial Times that exponential growth within the decentralised finance (DeFi) space is a ‚wake-up call‘ to regulators

Bank of International Settlements (BIS) innovation hub executive Benoît Cœuré has said the crypto sector is likely to see a global regulatory framework in place in 2022.

Cœuré says that the last year has provided a “wake-up call” to regulators across the world and that action is needed in the coming year. The BIS innovation hub boss notes that the last few months have seen talk among global regulatory agencies focus more on the need for action.

The ex-European Central Bank council member notes that the cryptocurrency sector has seen significant growth over the past few years and that time has come for a framework that’ll provide the needed regulatory guidelines and oversight of the industry.

Now’s the time for crypto principles framework

The exec says allowing the DeFi to grow as it has done doesn’t mean regulators were wrong. Rather, he believes this is what has provided ‘a wake call’ and how regulatory authorities have been able to understand crypto assets and how they work.

According to him, the fast growth and increasing mainstream adoption of crypto across various sectors of the global economy mean that now is the time for “consistent regulation.”

He said that DeFi offers “interconnectedness with traditional finance” and that this could pose a systemic risk. It’s a scenario that makes for a compelling case for a global crypto regulation framework, he added. 

But the problem, according to the French economist, is that countries and jurisdictions have been slow to take action and that puts regulators on different paths.

Regulation pace ‘slow’ and countries acting on different paths

This year, China has banned crypto trading and mining, while India has a bill looking to regulate the crypto space in the country. In the US, lawmakers recently met several crypto executives with the intention of getting insight into how to best regulate the burgeoning industry.

Cœuré believes a united global approach to the matter will prevent bad actors from exploiting loopholes likely to exist if different approaches are adopted.

“The risk in 2022 is that large jurisdictions like Europe, the UK, the US, China, keep moving on but along different tracks and produce a system which is globally inconsistent,” he told the Financial Times.

The post BIS Exec Benoît Cœuré says global crypto regulation likely in 2022 appeared first on Coin Journal.