Market Update & Analysis 4/5/18

2018 has been off to a crazy start. The market moves so fast, we understand it’s sometimes difficult to discern all of the breaking news that occurs on any given day. We’re committed to helping you navigate it, focusing on updates that really matter and filtering out the noise. Here’s a brief update on the good, the bad, and the ugly of the current market dynamics.

Market Update: Bitcoin has been ranging within a downtrend recently, but it has recovered 50% from lows set in early February. Given Bitcoin’s dominance, the total cryptocurrency market capitalization dropped from $441B to $269B at the end of the period. The downward pressure can be attributed to several catalysts. A rumored ban on South Korea trading caused a sharp drop in price. On the institutional investment front, valuation and volatility concerns have limited inflows of capital and trading volume.

Despite these tangential challenges, the network remains strong, as hash rate and difficulty continue to increase month over month. SegWit adoption continues to slowly increase, providing a scaling solution that lowers transaction speeds, increases throughput, and lowers transaction costs. OTC markets have seen increasing demand, with multiple Billion dollar buys open at month-end. As such, we remain cautious in the short-term and bullish in the medium to long-term as fundamentals continue to improve, additional clarity is gained on the regulatory front, and we see the return of institutional capital.

The Good:

Wyoming pass 5 Pro-blockchain Laws

Despite the regulatory uncertainty over the past few months, cases like Wyoming have offered a shining example of how to implement thoughtful regulation that includes the nuances that this technology deserves.

Congress publishes positive report on Cryptocurrency

For the first time, the annual 2018 Joint Economic Report discusses blockchain technology and cryptocurrency at length, recommending the public becomes familiar with the topics. The report’s authors recommend that lawmakers work with developers and businesses to deploy new technologies while ensuring compliance with relevant regulations.

A Cryptocurrency Summary from G20

The regulation of cryptocurrency was among the main topics discussed at the G20 meeting in late March. While no regulation materialized from the meeting, the outcome was positive, as member countries appear more likely to take a measured approach to regulating the industry.

The Bad:

Cryptocurrency Complaints to Consumer Protection Agencies on the Rise

With the recent market correction, cryptocurrency-related reports to foreign and domestic consumer protection agencies has risen substantially. The lack of clear regulation, particularly for digital asset exchanges, has complicated the issue. These issues highlight the need for legislation that protects consumers while providing developers and businesses the flexibility to operate.

Cryptocurrency Class Action Lawsuits, a New Frontier

Alongside significant fluctuations in price, there has been a rise in class action lawsuits filed against blockchain-related companies. While the have been several high-profile lawsuits, the opportunity to establish precedent in these cases provides incremental regulatory clarity moving forward.

The Ugly:

LitePay Ceases Operations Prior to Launch Due to CEO Controversy

On March 26, Litecoin Foundation, the sponsor organization behind Litecoin, announced that LitePay was ceasing operations. LitePay had delayed its launch of a Litecoin-based debit card and merchant payment processing, and its lack of transparency led to Litecoin Foundation withholding funding. This development highlights the importance of product-level due diligence with high-profile projects.

Apr 5, 2018 0 Comments

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