The cryptocurrency market is known for its extreme volatility. The next thing you know, the entire market is already losing billions of dollars. And this is exactly what happened recently after a bullish run.
In just the last 48 hours, the cryptocurrency market lost around $20 billion. Major cryptocurrencies including Bitcoin, Ripple, Ethereum, Bitcoin Cash, and even Cardano lost around 2% to 5%.
The price has been on a decline since May 6 since Bitcoin wasn’t able to reach the $10,000 support level. And because it has a psychological importance for continuing a bullish trend, it has created a domino effect across many cryptocurrency exchanges.
SEC Issue With Ethereum
Ethereum has been under scrutiny by the SEC lately. And this could be one of the reasons as to why the entire crypto market is bearish. SEC would soon reach a decision whether or not to consider Ethereum as a security or a commodity.
Currently, Ethereum is considered a commodity. However, there is “flexibility” on the part of the cryptocurrency which is enough reason for SEC to choose either. This is according to Zach Fallon who worked as a former senior council with the SEC. Fallon is now a securities law attorney and consultant and senior legal advisor for Dispatch Labs.
Ethereum Foundation’s blockchain network was bootstrapped via a presale in August 2014. And for this reason, this is what makes Ethereum different in contrast to Bitcoin. Bitcoin has been considered a commodity considering that there was no pre-launch ICO.
Howey test is used by the SEC in order to determine a security. And unfortunately, ICOs by definition can pass the Howey test.
Fallon said that “With bitcoin, there was no offer of investment opportunity in a way that would trigger the Howey test”. He added that “The efforts to create bitcoin came solely from the miners themselves in security the network. And, in that regard Bitcoin wouldn’t pass the Howey test”.
Coinone and Ripple Partnership
As for Ripple, despite the slump in recent days, Ripple team announced that Coinone Transfer officially joined RippleNet. The payments business is going to use xCurrent which is the popular blockchain solution offered by Ripple for cross-border payments.
Coinone is one of the largest exchanges for digital assets in South Korea. And with this partnership, it is going to be the first to use RippleNet in the country. According to reports, Coinone handles around $97 million-worth of transactions daily. It plans on using Ripple in order to process cross-border payment and even advance some other applications.
According to Coinone Transfer’s CEO Wonhee Shin, “We are proud to be the first digital exchange in Korea to join RippleNet and implement Ripple’s xCurrent solution. Ripple’s xCurrent solution will revolutionize the lives of our customers by providing them with a real-time, low-cost global remittance service”.
Will the crypto market recover in the coming days? Is it simply just a case of people getting some of their profits after a bullish April? Will Ethereum be considered a security by the SEC? These are just some questions that investors have in mind.