SEC and Google vs cryptocurrency
For the last time the stock market experiences a strong pressure of negative news background. Not long ago, IMF chief Christine Lagarde said the need to tightly control the cryptocurrency industry. Recently it became known that Google is after Facebook banned advertising of virtual currencies and ICO. Commission and securities and exchange Commission (SEC) has demanded the registration of all kryptomere.
These news have a negative impact on the dynamics of the market almost since the beginning of the year. First, they deprive small investors of a chance to enter the market. Secondly, reduce the possibility of different groups of investors at the expense of more thorough compliance control.
Now to the already mentioned factors added another two news. The first protracted trial between Ripple Labs Inc. and a consortium of R3. At the last hearing, the court of the state of Delaware decided in favor of the R3. Now the final word for the new York court, which must render the final verdict. The story began in September 2017, but the main development began on 10 January of the current year. Since then, Ripple quotes declined sharply from $2.7 to $1.
It is worth noting that the drop Ripple coincided with the General trend of the stock market. We combined graphs of Ripple and bitcoin, and they almost coincided. However, news of Delaware has provoked more strong and clear collapse. Ripple was at the peak of popularity, but after the reports about the court’s decision, the course of bitcoin went down and was a real disappointment for investors. In the end, the Ripple percentage in total market capitalization declined from a record 19% as of 4 January this year to 8.6% on January 17.
When will the stock market recover?
The second important news was the increasing regulation of the stock market from the classic American regulators: the securities and exchange Commission (SEC), Commission on urgent exchange trade (CFTC), the office for combating financial crimes (FinCEN). The SEC’s requirements set the tone on the market 6 Feb. By this time the negative news has already been priced in, however, the preceding trend was very significant. Since the beginning of February bitcoin has dipped from $10,000 to $6000.
Pressure on the market has intensified in the background passed in US Congress hearings about the stock market and currencies. The discussion was contradictory and full of emotions. On the one hand, it was obvious the desire of the regulators and authorities to limit the risks to investors. On the other hand, criticism of the very idea of regulation made cryptologist. As a result, the market knocked out “sideways”; the drop was small — about 10%.+
Most likely, in the short term, the trend for regulation of cryptocurrency exchanges will continue. To access trading venues will become more difficult, the account opening process will take longer. This could cause a local drop in the market. At the same time, greater control can draw on the cryptocurrency market hedge funds and large investors. So, after a short fall there may come a slow growing trend.