Happy Monday crypto-scientists! We hope your weekend was a good one, and that you remain as enthusiastic and optimistic about the ongoing revolution of digital finance as we here at Coin Clarity. In this episode, we talk about the stall (or diminish) in the price of BTC, why we’re certain its still not a bad thing for crypto in general, talk about the corporate acquiescence to the public’s demand for blockchain acceptance, and ongoing developments in world government regulatory standards.
BTC Down 28% Over the Last 30 Days, Market Crowded With Newcomers
It certainly hasn’t been a great last 30 days for bitcoin. The godfather of all cryptocurrencies is currently down close to 30% in this time period — a record drop after achieving record highs on near-weekly basis during the course of 2017. This certainly isn’t bad or surprising news to digital currency enthusiasts in general, however. Although its only been 2 solid weeks into the new year, the total market capitalization of all cryptocurrencies combined has climbed from $600 billion to $700 billion, or over 1% per day. For the first week of 2018, this metric of total cryptocurrency value seemed on an unstoppable march towards the $1 trillion mark, reaching as high as $830 billion before settling back down to its present level of around $700 billion. All this growth is occurring in spite of bitcoin’s rest, thanks to the addition of new cryptocurrency projects on what seems like a daily basis.
Bitcoin itself still comprises over 30% of the total crypto market cap amount, its own capitalization being roughly $245 billion dollars, but this is an ever-falling percentage thanks to the increasingly crowded space of the market. Take for example the story of Chris Larsen, co-founder of the shooting star banking coin Ripple (XRP), who briefly saw his net worth surpass that of Facebook founder Mark Zuckerberg’s, thanks to Ripple’s astounding 36,000% rise over the course of 2017. Dogecoin (DOGE), which started out as a “joke” in 2013 by bitcoin enthusiast Jackson Palmer, was based on the “doge” meme and didn’t necessarily aspire to replace bitcoin or expand on its technology on any way. However, its low transaction fee of 1 DOGE and near-instant confirmation times, thanks to its 1-minute block structure (as compared to bitcoin’s 10-minute blocks), made it appetizing to advanced cryptocurrency users and it thus found itself in an indispensable niche in economy of the internet. As a result, DOGE’s $20 million market cap at the beginning of 2017 saw a hundred-fold gain over the course of the year, which peaked at an astounding $2 billion just one week ago.
Cryptocurrency Now Firmly in Corporate Focus
Mainstream media outlets now find themselves in a rush to inform their watchers, listeners and viewers with information on how to acquire bitcoin and next-gen cryptocurrencies. U.K.-based semi-tabloid The Sun recently published a guide for their rather aged and largely techno-ignorant readership on how to purchase bitcoin, explaining the risks of investing in the blockchain space, while also providing a basic description of top alts Iota (MIOTA), Ethereum (ETH) and Ripple. Big-time, long-standing corporations are also now finally caving into the crypto craze. In Canada, KFC announced a delivery-only promotional item known as the “Bitcoin Bucket” via Twitter, which managed to sell out rather quickly despite the $5 premium purchasers had to pay in order to cover the transaction costs.
KFC’s move was hailed as “bizarre,” “ridiculous” and economically unfeasible. At the same time, it signifies an underlying shift in corporate attitudes toward the real-world implementation of cryptocurrency technology – ala Jamie Dimon’s reversal as discussed in last Thursday’s Check Up article – which arguably lag behind those held by the general public. Even though KFC may be a few years too late in implementing the acceptance of bitcoin as a genuine form of payment, and it may be hard to embarrass the likes of insulated multi-billionaires such as Dimon, the corporate world remains beholden to the wants and trends of their customer base, which now include the usage of non fiat-based forms of currency.
Regulation Remains Haphazard, Unstandardized
Government and banking regulation of cryptocurrency, on the other hand, continues to sway widely and varies largely from country to country. South Korea, which had announced its plan to ban cryptocurrency usage country-wide earlier in the week, is now back-tracking on those statements, after a very vocal public outcry and some internal discussion on how to best move forward in regards to burgeoning, transformative technology. An existing real estate bubble in England, on which some of crypto’s new millionaires are using to further enhance their profits, is the cause of several housing lenders’ decision to outright prohibit the use of bitcoin during property transactions in the country, who cite its anonymous nature and heavy association with money laundering as their rationale.
Meanwhile, countries like Australia are seeing more and more “Bitcoin Buyer-Friendly” properties go up for sale, whose legal framework during real estate purchases mandate the payment of transaction-related taxes in the country’s native currency. In the United States, where cryptocurrency regulations remain relatively lax, 33 out of 75 property transactions involving cryptocurrency were “bitcoin only” during 2017, meaning the seller wouldn’t even consider taking US dollars for purchase of their real estate.
Also in the News
Singapore is one-upping the “western” governments of England, Australia and the U.S. by not only validating the existence and usefulness of cryptocurrencies but also wishing their continued welfare after a predicted “crash.” A cryptocurrency bubble has long been speculated but most other world governments or central banks have not been quick to acknowledge its likelihood. With underpinnings extraordinarily similar to the “tech bubble” that shook the stock market in the first few years of the 21st century a “crypto bubble,” an “irrational exuberance” within the cryptocurrency community is not only speculative but highly likely.
This likelihood does not spell the demise of cryptocurrency, but rather signal that it is currently over-valued and that a massive correction of sorts is in the works. How the correction will manifest itself remains an unknown variable. Since Singapore is one of the more “westernized” countries of Asia, it is best to heed their warning going forward, and it is advised that holders of multiple coins pay careful attention to their wallets if they want to be sure to lock in accumulated profits.