Good afternoon, crypto-oligists and other travelers, and we hope your week so far has been a good one. This Thursday we continue our examination of the price of BTC and its movement, look for clues as to where the big money is going and recap some of the week’s biggest announcements. While the future price of bitcoin remains uncertain, we can be certain that Wall Street is here to stay, lending credence to the idea that the blockchain has the power to reshape the financial industry.

Price of BTC Remains Relatively Stable

The price of bitcoin slowed its trend downward over the last 7 days, falling some 6%, and is now down close to 30% over the last 30 days. While 2017 was a year that was anything but boring for bitcoin, 2018 has seen a reversal in investor sentiment. Though big money flow outwards overpowered what might be considered “late investor” money during late December and early January, the two forces have now leveled off, bringing some stability to the grandfather of all cryptocurrencies.

Perhaps Big Money has now acquainted itself properly with the technicalities of bitcoin and has seen what happens under the strain of its of its system and understand that it does not necessarily operate or trade like any other commodity: it is a commodity built for trading. As anyone who experienced having to pay $10-$30 transaction fees will tell you, bitcoin loses its intrinsic value as a currency if the coin itself becomes too expensive and its network gets overloaded.

More likely, Big Money learned just enough to get in ahead of each other to blow up some legitimate coins, raked in some huge profits, and then knew already the market signals to time a strategy to maximize profits. Like it or not (you probably do if you were in before them), Wall Street is here to stay.

Big Money Flows to Little Alts

For the first time in the last year, since big Wall Street money started pouring into the cryptoverse, there is net money flowing out of bitcoin and into third-tier altcoins, thanks to institutional investors locking in profits to contribute to their search for the next big thing. Now that Big Money has had its way with bitcoin and the top 10 alts, its search is widening towards smaller market cap coins, which may or may not be backed by legitimate claims. Many coins likely benefited from the “invest first, ask questions later” mentality currently being used by institutional-size investors.

A few of the coins up over 100% in the last 24 hours:

  • SmileyCoin (SMLY), up 186%
  • PonziCoin (PONZI), up 127%
  • SecretCoin (SCRT), up 107%

Up and down across the total span of coins and tokens, huge money is entering every day, pumping random coins up 50 to 100% in sudden market moves. As a result, a flood of tiny altcoins have seen price explosions over the last month, putting them as the primary driver of the increasing total cryptocurrency market capitalization (market cap), as the price of BTC has fallen some 30% in the same time period. The total market cap reached an all-time high of $832 billion on January 7th, before falling to a low of $417 billion on January 18th. It has since retraced to its current figure of about $500 billion, perhaps signaling that the worst is over, for now.

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Major Powers Discuss Regulation

Furthering the outflow of bitcoin are increasing threats of regulation, this time coming from United Kingdom and speakers at a world forum. British Prime Minister Theresa May told Bloomberg earlier today that her government will be looking at ways to crack down on cryptocurrency use, citing its association with criminality and a university report which claims that up to 25% of all bitcoin transactions are related to drug sales or other illicit activities. Meanwhile, at the World Economic Forum in Davos, Switzerland, Nobel Prize winning economist Robert Shiller stated in front of representatives from hundreds of nations that bitcoin will not be a “permanent feature” of finance, describing cryptocurrency as an “interesting experiment.”

Billionaire investor George Soros also had some unflattering words to say about bitcoin at the Davos conference, answering a question by stating that it is not a currency. He proceeded to explain: “A currency is supposed to be a stable store of value, and a currency that can fluctuate 25% in a day can’t be used to pay wages.”

When asked for his opinions on the matter at the annual summit, U.S. Treasury Secretary Steven Mnuchin had a much more goal-oriented focus, stating that he wanted to “make sure that they’re not used for illicit activities.” Regardless of tax-related decisions and the legal murkiness that surrounds the transformative financial technology known as the blockchain, Mnuchin assured that stopping crimes from taking place remained the first objective when it came to the enactment of future legislation in the country.

Also in the News

  • In the news of firsts for bitcoin, BTC was used to settle a freight deal between two international parties. A vessel carrying wheat from Russia to Turkey received payment in bitcoin as part of a test project launched by crypto payment company Prime Shipping Foundation. The company hopes to employ the blockchain in the future release of its own coin, to not only speed up payment and remittances but more efficiently handle complicated logistics associated with the shipping industry.
  • English Premiere League football team Arsenal announced its partnership with casino software creators Cash Bet, making them the first football club to have public sponsorship from a cryptocurrency company. Arsenal’s recent winning streak and placement as a cup finalist is likely a smart move by CashBet, who plan to release their own ICO later in the year.
  • An altcoin which had its beginnings in 2013 is now the target of a Ponzi scheme investigation. Charges have been filed against a U.S. couple who ran a Nevada-based investment company that specialized in the sale of My Big Coin (MBC). Associated court documents accuse the couple of “making false and misleading claims and omissions about MBC’s value, usage, and trade status, and that MBC was backed by gold” during their sales pitches with clients. The couple is also accused of misappropriating $6 million in customer funds, spending most of the money on luxury items and a house.