If you will look at blockchain technology and the possible benefits that it can offer businesses, institutions, and everyday individuals, there is no denying why it has the potential to one day replace money. What it offers is an option to get rid of third parties that confirm transactions. Unfortunately, things are more complicated than we thought. Because it used to be unregulated, there are many individuals and groups that use cryptocurrencies in order to scam other people.
And for this, regulators are looking to take a closer look at different cryptocurrency projects lately. Recently, because of the intensified clampdown, the price of Bitcoin went down further below $8,000. And up to what extent are the regulators moving towards stricter rules and regulations? The US Justice Department is now probing price manipulation into the crypto market.
The investigation is mainly focused on the possibility that there are some groups and individuals that are using tactics to manipulate price ranging from fake orders to flooding markets. Prosecutors are now working hand in hand with the Commodity Futures Trading Commission regarding this matter. One of the most common reasons why there should be an investigation regarding the matter is due to the unexplainable wild swings in the market.
China is one of the first countries that initiated the move to ban crypto-related activities in the country. ICOs were targeted by authorities. And so far, there are a good number of people involved that have been fined and even imprisoned for running cryptocurrency scams.
Aside from China, both South Korea and Japan are also doing what they can to add regulations in the crypto space. Both South Korea and Japan have new exchange regulations that even scared some established cryptocurrency exchanges such as Krakken.
Big Investors Aren’t Afraid of Bearish Trends
So just how much did these things affect the cryptocurrency market? The market has dropped by more than 55% since the beginning of 2018. From $829 billion, we currently have a crypto market that has a total value of $372 billion. Is there a reason to be concerned?
It seems that regulatory changes are needed in order to get institutional investors to get involved. In fact, NYSE and JPMorgan are already interested in investing in the cryptocurrency market. The same can be said for Goldman Sachs.
Come to think of it, there are more institutional investors, retail traders, and even banks that are involved today in the crypto market despite the fact that everything top digital currency is looking bearish. It is possible because these large businesses take this opportunity to buy more shares at a lower price.
According to Erik Voorhees who works as CEO at ShapeShift, “I’m all for financial companies getting involved in crypto. Crypto as a monetary unit is transparent and legitimate because it’s market-based, as opposed to what they do now, which is handling fiat, which is not transparent and not market-based”.
Is it time to buy while it is still low? Or is it the time to cut your losses and sell as many cryptocurrencies as you could? Considering the unpredictability of the market, there is no possible way of predicting the future of cryptocurrencies.