The new week on the market began with a price correction: on Monday, Bitcoin price went down to $3,463, approaching the 2018 all-year low ($3,200). Bitcoin was not the only coin to suffer a drop: Ripple lost 5%, Ethereum – 6.7%, and the total market capitalisation fell by 5%. So what led to the price change? Let’s recollect the week‘s main news.
The CBOE withdrew VanEck and SolidX’s application to launch Bitcoin ETF
The US Securities and Exchange Commission (SEC) announced the decision by the Chicago Board Options Exchange (CBOE) without specifying the reasons for the application withdrawal. The crypto evangelists are still hopeful, however: VanEck stated that despite the regulator’s refusal, they intended to go ahead with their plans and re-apply after discussions with the agency. VanEck и SolidX filed a joint application for Bitcoin RTF in June 2018 but the SEC has several times postponed a decision.
The State of Wyoming introduces a ground-breaking Bill
On 22 January, the USA State of Wyoming introduced a Bill that will grant crypto currencies the same status as fiat money. The Bill’s author is Tara Nethercott with 8 senator co-authors. The document can have far-reaching consequences as the U.S. is a crypto market growth driver and the SEC decisions impact the main crypto currency’s price quotations.
According to the Bill, there will be three classifications of digital assets: digital consumer assets, digital securities and virtual currencies. The authors proposed the following: a digital security, a digital consumer asset that will be a utility token equivalent and a virtual currency to be used as a medium of exchange, a monetary unit of account or a store of value. We have discussed in detail the difference between a security and utility tokens on our blog.
The classification is not new, but its potential legislative recognition will provide clarity and lay a solid foundation for a widespread adoption and proliferation of cryptocurrencies.
The regulators’ stance is still negative…
Not all countries can pride themselves on such loyal legislators as Wyoming: last week, the British regulators announced that cryptocurrencies posed a threat to economic stability. The Bank of England stated that cryptocurrencies had no value: they are slow in circulation and cannot be considered an ideal means of exchange. The IMF also claimed that cryptocurrencies could threaten public economy.
Binance launched an OTC crypto platform
The exchange’s spokesperson announced that many cryptocurrencies would be listed. Bittrex and OKEx earlier announced a launch of OTC platforms.
What is an OTC platform?
The OTC (Over the Counter) market appeared before centralized and decentralised crypto exchanges came to the scene with the first platforms emerging in 2013-2014.
An OTC platform is a venue where users buy cryptocurrencies from each other. They were created by former traders, hedge funds, payment systems and miners. An average transaction value on an OTC platform often exceeds $1 million and in large transactions – $100 million.
The Bakkt launch was delayed again
The launch of the Bakkt crypto platform the community had been awaiting for several months was postponed again. This time because of the U.S. government’s shutdown, which started on 22 December 2018 and temporarily ended on 26 January 2019.
Despite this, the site disclosed the details of BTC would-be futures. The instrument will be named Bakkt BTC (USD) Daily Future. Each contract will be worth 1 BTC. The minimum allowable price fluctuation is $2.50 per BTC. The commission fee to cover clearing costs will be $0.50. It also became known that Bakkt, with the support of Blockstream, will feature price changes on more than 400 fiat and cryptocurrency pairs.