Čvc 21

Bitcoin is ‘Not an Investment … It’s a Trade,’ Says Billionaire Howard Marks

Howard Marks, co-founder and co-chairman of Los Angeles-based distressed debt investor Oaktree Capital Management, slammed Bitcoin for not having any substance — while saying investors are merely speculating on its price without being able to judge its intrinsic value. 


‘It’s Not an Investment’

Marks took part in CNBC’s eighth annual conference for institutional investors – Delivering Alpha — which was held in New York, where he expressed his rather negative sentiment towards the first and foremost cryptocurrency.

Marks noted that Bitcoin (BTC) 00, which has a market capitalization upwards of $126 billion, fails to fulfill the definition of an investment, stating:

It’s not an investment … it’s a trade.

He went on to imply that any and all long-term investors are merely speculating on its price, stating that those who buy Bitcoin do so “Not because they can specify its intrinsic benefits. Not because they can judge the intrinsic value. But only because they think it’s going up.”

The billionaire investor also made reference to the “Greater Fool Theory” — a popular argument which defines the price of an asset not by its intrinsic value but rather by the expectations of the market participants.

Marks also expressed his bearish stance on the future of Bitcoin, stating:

In the long run, I think it will be shown not to have any substance.

It goes without saying that Bitcoin has its fair share of speculative traders. However, can’t this be said for other asset classes as well? Marks has already once acknowledged that he doesn’t know what’s behind Bitcoin, yet this hasn’t kept him from bashing it and everyone who believes in its value.

Meanwhile, one of the world’s largest financial services providers, MasterCard, won a patent which purports to pave the way for crypto-based credit card payments — essentially hinting that the company believes cryptocurrencies are here to stay.

‘Unfounded Fad’

It’s worth noting that Marks’ latest talks are fairly lighthearted compared to his previous outbursts on Bitcoin.

In one of his memos of 2017, he slams cryptocurrencies as an “unfounded fad”:

In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme) based on a willingness to ascribe value to something that has little or none beyond what people will pay for it.

His remarks greatly resemble ones from another prominent figure in the financial world – JP Morgan Chase’s Jamie Dimon — who also believes Bitcoin and other cryptocurrencies are a fraud. However, Dimon has since taken a U-turn on his statements, publically acknowledging that he regrets making them.

Not surprisingly, Mr. Marks once also admitted that his views on Bitcoin were mistaken and that he had been looking at the cryptocurrency the wrong way.

Do you think Bitcoin has no intrinsic value? Don’t hesitate to let us know in the comments below! 


Images courtesy of the Bitcoinist Archives, Shutterstock.

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Čvc 20

New Zealand Bank Shares Belief in Blockchain

SBS Bank in New Zealand seems to be considering using blockchain technology as a way to provide an improved user experience for their clients.


While some financial institutions are vehemently denying their customers’ interest in cryptocurrencies, New Zealand’s SBS Bank is taking a more pro-active approach.

According to The Southland Times, virtual currencies and blockchain technology were two of the topics discussed at the bank’s recent annual meeting. While the former still has the power to elicit skepticism, the latter is definitely a keen point of interest. The bank’s group chief executive, Shaun Drylie, explained:

We think, and the common consensus is, that it has real merit. Cryptocurrencies, we’re not too sure, and if you look at the volatility of cryptocurrencies that would suggest the market is not too sure as well.

However, this does not mean that there won’t be a possible place for cryptocurrencies in the bank’s future. Drylie added:

We’re keeping a close eye on it, but it’s very hard to pick where it’s going to go long term.

SBS chief executive, Shaun Drylie

Banking for All

Exploring the uses of blockchain technology is part of the institution’s plan to make banking more efficient for its existing clientele and more inclusive for its potential customers. They hope to provide a comprehensive banking experience to those clients who have limited access to their physical branches.

Financial inclusivity is a popular term when discussing the benefits of blockchain. This could be in the form of allowing the unbanked population, or those with restricted access to economic assistance, to easily get credit or apply for a loan.

All of the applicant’s information could be stored and easily accessed via the distributed ledger, making the reams of paper seemingly synonymous with loan applications a thing of the past. With SBS seeing an 11 percent increase in loan approvals, this could be where blockchain could make a difference.

No Stranger to Blockchain

This is not the first bank in the country that has turned to blockchain technology. The Australia and New Zealand Banking Group (ANZ) and IBM have previously collaborated to create a more systematic and efficient solution to insurance reconciliation processes. The financial institution also used blockchain to digitize their previously paper-based bank guarantee process.

However, interest may soon turn more to virtual currencies with the possible introduction of Bitcoin ETFs. Major player Cboe Global Markets has filed an application with The US Securities and Exchange Commission (SEC) for approval thereof. Bitcoin futures trading, which began late last year, has also seen growth since it launched.

Do you think that more banks will turn to blockchain technology to replace their paper-based systems? Let us know in the comments below!


Images courtesy of John Hawkins/Stuff, AdobeStock

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Čvc 19

Crypto Company Change Launches App to Trade Bitcoin Commission-Free

A stream of positive developments and new products is helping to boost Bitcoin’s adoption rate. One of the latest products is Change Wallet, a mobile app for trading Bitcoin and other cryptocurrencies with zero commission fees.


Change CEO Predicts: Cryptocurrencies Will Be Used As Much As Fiat Money

Change, a company headquartered in Estonia and financed from Singapore, has launched Change Wallet – a mobile app that allows users to buy and convert between cryptocurrencies. This multicurrency app supports digital assets such as Bitcoin, Ether, Ripple, Litecoin, and Tether.

According to the company, Change Wallet facilitates the execution of financial transactions and payments and provides access to an array of other financial services.

Significantly, no commission fees are charged for the transactions executed with Change Wallet, according to Change’s press release dated July 18, 2018.

Change Wallet is now available to residents of the European Economic Area in IOS and Android operating systems.

Joining the experts predicting that Bitcoin is here to stay and that it is eventually going to be used in everyday life, Change’s CEO Kristjan Kangro declared at the launch of the app:

Cryptocurrencies will soon be used just as much as traditional currencies by the masses when paying for good and services.

Solving Traditional Banks’ Major Limitations

Change Wallet allows sending, receiving, and storing several cryptocurrencies as well as fiat currencies, including US dollars and Euros.

As Change’s whitepaper explains, because Change Wallet is a mobile app, it solves three significant problems affecting traditional banks.

Specifically, users can handle all transactions via the app, thus avoiding the inconvenience of needing to go to the bank. Moreover, Change Wallet can provide banking services to the millions of unbanked people around the world.

As Bitcoin continues its inexorable trajectory to test the USD 8,000 resistance mark, the crypto community is encouraged by initiatives, such as Change’s, that contribute to increasing Bitcoin’s adoption rate. One of Change Wallet’s supporters, Roger Crook, former CEO of DHL Global Forwarding, says:

I’m backing this project because I think it’s got an extremely great future, and I see that Change is going to have challenges going forward. I have no doubt that this business is going to thrive and grow globally over the coming years.

How do you think the commission-free Change Wallet will impact Bitcoin trading? Let us know in the comments below.


Images courtesy of AdobeStock, Twitter/, Change

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Čvc 17

Mueller’s Indictment Could Increase Regulatory Bitcoin Oversight

Bitcoin may face increased regulatory scrutiny following recent events. Special counsel Robert Mueller indicted 12 Russian officials of using cryptocurrency and large-scale hacking to interfere with the 2016 U.S. presidential elections.


The U.S. Department of Justice (DOJ) indicted 12 officials from the Main Intelligence Directorate of the General Staff (GRU), Russia’s intelligence agency, who have reportedly used bitcoin to interfere in the 2016 U.S. presidential election.

Bitcoin Under the Radar

Mueller’s indictment places the emphasis on the usage of Bitcoin as means for money-laundering and other illicit activities:

The use of bitcoin allowed the Conspirators to avoid direct relationships with traditional financial institutions, allowing them to evade greater scrutiny of their identities and sources of funds.

The usage of Bitcoin as well as cryptocurrencies, in general, as a means for illicit activities could enhance the scrutiny that they face.

What’s more, President Trump signed an executive order July 11, setting up a task force within the DOJ, ordered “to investigate and prosecute crimes of fraud committed against the U.S. Government or the American people, recover the proceeds of such crimes, and ensure just and effective punishment of those who perpetrate crimes of fraud” associated with digital currencies.

Is It Called For?

Bitcoin has been tied to illegal activities in the past, but previous reports show that it’s far from being as dangerous as some try to make it look.

International institutions have released several studies, displaying that cryptocurrencies, in general, do not pose significant risks when it comes to their usage for illicit activities.

A recent report of the Financial Services and Treasury on Money Laundering and Terrorist Financing Risk Assessment showed that cryptocurrencies are avoided by organized crime. Similar conclusions were reached in a report issued by the UK’s National Crime Agency, and by the Quebec Government.

Coincheck NEM laundered

Unsurprisingly, many Bitcoin advocates are skeptical of the calls for increased regulation. Jerry Brito, executive director of the virtual currency policy nonprofit Coin Center, said:

Bitcoin faces the same challenges of perception that the early internet did. […] Good guys can use it and bad guys can use it.

They Used Bitcoin and Got Caught

Mueller’s indictment itself outlines the transparency introduced by Bitcoin’s public and transparent ledger. While Bitcoin itself is pseudonymous, which is akin to having a screen name on the Internet, every transaction can be easily tracked on its immutable blockchain. This allowed investigators to identify some of the digital transactions conducted by the indicted officials.

It is doubtful whether the given individuals would have been identified had the same transactions been carried out using cash dollars.

While it’s true that proper regulation is capable of further accelerating Bitcoin’s widespread adoption, it’s important to be particularly careful, especially when it comes to its actual usage for illicit activities.

Do you think Bitcoin is widely used for illegal activities? Don’t hesitate to let us know in the comments below!


Images courtesy of the Bitcoinist Archives, Shutterstock

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Čvc 15

Lack of Bitcoin-Based ETFs Challenges Cryptocurrency Investment Markets

With the decision on whether a cryptocurrency-based exchange traded fund (ETF) will ever launch in the U.S still sitting firmly with the Securities and Exchange Commission (SEC), experts continue to speculate on the market and its potential. 


Managed investment funds based on cryptocurrencies may offer a less risky investment route for concerned investors, or a more familiar route for traditional, institutional investors.

Though CBOE and CME Group launched bitcoin-based futures in December 2017, and the SEC has approved seven blockchain-based ETFs so far in 2018, the bitcoin or cryptocurrency-based ETF is still the holy grail of the market. Some believe an outstanding bitcoin-based ETF application could be approved as soon as next month.

Republic of Georgia Emerges as a Global Leader in Cryptocurrency Mining

Difficult to Value

A bitcoin-based ETF would be a major coup for the cryptocurrency space. The SEC is hesitant, however, citing concerns of price volatility and the difficulty in actually setting a market price to base fund payouts upon.

Matthew Hougan, global head of research at Bitwise Asset Management, claims that judging what the right prices are for cryptocurrencies — aside from fund premiums — is difficult, noting:

The crypto ecosystem hasn’t evolved an agreed-upon framework to value crypto.

Hougan believes that cryptocurrencies could become widespread alternatives to money, like gold, putting a floor under prices. “It’s entirely feasible that a new store of value could emerge in the world,” said Hougan, “I don’t think that concept began and ended with gold.”

Hard to Gain Exposure

One existing fund is performing well. The Bitcoin Investment Trust has seen an average trading price 56 percent above the portfolio’s asset value according to Morningstar, but it has little in the way of competition. Its performance could see a sharp decline if bitcoin-based ETFs bring choice to the market.

“The challenge with cryptocurrency-oriented investing is it’s hard to gain exposure, as there are no U.S listed ETF.s,” said Todd Rosenbluth, director of ETF and mutual fund research at CFRA Investment Research. “When the supply to gain exposure to Bitcoin grows via ETF choices and better meets demand, the premium will narrow.”

Crypto Hedge Funds on the Precipice - What Does the Future Hold?

Blockchain Versus Bitcoin

Other experts think that investors are better placed to look towards blockchain technology-based investments. Joe Davis, head of Vanguard’s Investment Strategy Group, is one — stating that he was “enthusiastic” about blockchain but, for bitcoin, there is a “decent probability that its price goes to zero.”

Hougan recommends caution but believes Bitcoin has potential, predicting that adding bitcoin to a 60 percent stock and 40 percent bond portfolio could improve its performance.

Bitcoin-based ETFs could be one of a number of market signals institutional investors are waiting for to truly enter the cryptocurrency market and fuel its next boom. 

Do you think the launch of Bitcoin-based ETFs will make a difference to Bitcoin’s price? Are blockchain-based ETFs better? Let us know your thoughts in the comments below! 


Images courtesy of Shutterstock, Bitcoinist archives.

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Čvc 14

New Power Rates for Cryptocurrency Miners in Upstate New York

The New York Public Service Commission (PSC) has approved new electricity rates for cryptocurrency miners in Upstate New York.


Details of the New Rates

In a press release issued by the New York PSC, high-density power consumers like cryptocurrency miners under the Massena Electric Department will pay new utility rates. The new rules approved by the New York PSC aims to protect existing electricity customers while at the same time encouraging miners from setting up shop in the area.

As part of the new plan, cryptocurrency mining operators will be able to negotiate with municipal power authorities in the area. By so doing, utility companies can review the energy demands of miners individually to come up with suitable contracts for each cryptocurrency mining facility.

To qualify for this new rate, miners must exceed a demand of 300kW and a load density of 250 kWh per square foot per year. Also, they must provide proof of benefits attached to their consumption. The new directive is an economic development assistance package that virtual currency miners in the area can enjoy.

Commenting on the new rate plan, chairman of the New York PSC John B. Rhodes said:

As part of our continuing effort to balance the needs of existing customers with the need to attract new companies, we must ensure that business customers pay a fair price for the electricity that they consume. However, given the abundance of low-cost electricity in Upstate New York, there is an opportunity to serve the needs of existing customers and to encourage economic development in the region.

New York Public Services Commission

No Downside for Existing Customers

One significant upside to the new electricity pricing policy is that it does not affect the rates paid by existing customers. Cryptocurrency miners and other high-density power consumers in Upstate New York that do not meet up with criteria will be placed in another pricing category.

Thus, existing customers are shielded from being made to pay a premium on electricity in an area that has one of the lowest utility tariffs in the United States. The new plan comes into effect on July 17, 2018.

Since the beginning of the year, cryptocurrency miners have been trouping into areas in Upstate New York looking to take advantage of cheap power and favorable climatic conditions. However, municipal power authorities weren’t best pleased with the development fearing that their power resources could become stretched.

In March, the New York PSA authorized power authorities in the upstate area to introduce premium tariff rates for cryptocurrency miners. With this new pricing plan, however, miners can rest easy now that they know where they stand.

Should other states that play host to significant cryptocurrency mining activities adopt the decision by the New York PSC? Keep the conversation going in the comment section below.


Images courtesy of dps.ny.gov, iStockPhoto

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Čvc 13

Bitcoin Ownership Rising Throughout Canada

Canada has seen an increase in its bitcoin ownership rate from 2.9 percent in 2016 to 5.0 percent in 2017. Usage trends have also shifted, with most Canadians now holding bitcoin primarily for investment purposes. 


The Bank of Canada has released its findings from a two-year long study that was completed to better assess Canadians’ usage and adoption of Bitcoin. The study, which began in 2016, followed central bank chief Stephen S. Poloz’s cautionary advice:

Cryptocurrency’ is a misnomer—‘crypto,’ yes, but ‘currency,’ no.

The Bank’s survey attempts to better understand Bitcoin’s role as currency and was administered in three waves, lasting from early 2016 until mid-2017. It coincidentally aligned with bitcoin’s extreme rise in value, which saw the market leader reach an all-time high of 19,738USD on December 17, 2017. The published study stated that:

The Bank of Canada’s interest in bitcoin is to understand whether its adoption and usage by Canadians could affect the financial system

The survey not only tracked bitcoin usage and adoption but also tried to garner a general sense of the public’s knowledge of cryptocurrency.

Canadians Prove They Know More

The published study revealed that not only had the percentage of those owning bitcoin gone up but that the general knowledge on cryptocurrency for both owning and non-owning citizens had increased. Quebec saw the largest increase in awareness, with a 28 percent improvement in score from 2016 to 2017.

The ownership of bitcoin among men aged 45 to 54 quadrupled over the two-year long research project, with an equally significant rise among those with a college or university level education. In general, bitcoin ownership saw a boost in all provinces of Canada — with notable growth in Ontario and the Prairies.

The survey also highlighted that usage trends have changed. Bitcoin owners in 2016 stated they were more likely to use their holdings for transactional purposes than those polled in 2017, who saw their holdings as a financial investment.

Bitcoin Enters Mainstream Finance in Canada, Mogo Announces BTC Trading App

Onward Canada

In the publication’s introduction, the Bank explains that:

[…] It is important to understand Bitcoin’s potential impact on how the Bank of Canada undertakes its core functions such as the production and distribution of currency.

This illustrates Canada’s preparation and willingness to consider bitcoin as it plans its financial future.

Canada has shown an openness to cryptocurrencies, with the nation reporting in early 2018 that it would not reconfigure its tax law to target them. The crypto-startup CBlocks moved from Miami to Canada earlier this year favoring the country’s less stringent regulations.

What are your thoughts on Canada’s role in the crypto-space?  Leave us a comment below and let us know! 


Images courtesy of Shutterstock, Bitcoinist archives, AdobeStock.

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Čvc 12

It’s Coming Home

Data gathered by some large financial institutions indicates that…

As such, football (or soccer where I’m from) has a very real impact on financial markets and it’s easy to see why. The phrase “it’s coming home” has literally become a greeting on the streets of England as the excitement gathers.

In an update earlier this week we showed how England’s victories on the pitch have had a clear impact on the Pound Sterling despite the very messy Brexit playing out in Parliament.

As the final game of the World Cup will be on Sunday when the markets are closed, tonight’s game will likely provide the best opportunity I’ve ever seen to actually trade the financial markets during a sporting event.

#TradeTheWorldCup

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Trade War is Back on
  • Bank of Canada
  • Litecoin is Up

Please note: All data, figures & graphs are valid as of July 11th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The stock markets fell pretty abruptly last night when this news broke…

The Trump administration was courteous enough to make the announcement during the market downtime, after the closing bell on Wall Street and before the opening in Australia, when most financial markets are closed.

Nevertheless, the stock indices were open and we can see the impact pretty clearly on the graph (purple circle).

In addition, president Trump is currently causing some massive waves in the geopolitical world just before his European Tour.

Several analysts have pointed out that Trump could be paving the way to dismantle NATO completely and with it decades of strategic defense partnerships. We can only hope that he’s bluffing but there are certainly no guarantees on this.

Rates Going Up

The Bank of Canada is set to raise their key interest rate this afternoon from 1.25% to 1.5%.

The economy there is doing alright but fears around the trade war are creeping in. With that in mind, bearish bets on the Loony (Canadian Dollar) are piling up.

Usually, the prospect of higher interest rates causes a currency to go up as more people will invest in that country to take advantage of the higher rate. However, the US Dollar has been gaining against her Canadian counterpart ever since the market turmoil began in early February (blue circle) pre-trade war.

Hodling On

The good news is that whatever caused the slide yesterday seems to have gone away by now. We may not be out of the woods yet just though.

Bitcoin has found itself a comfortable support level at $6,250.

Meanwhile, the number of transactions happening on the Bitcoin network also seems to be stabilizing. Even though we’re not near the levels seen during the December hype, it’s clear that a steady TPS (transactions per second) rate of around 2.25 has ensued since early February.

This is really great for the network as it gives time for the lightening solution, which is still officially in beta mode, to be perfected.

LTC In the Green

One crypto is bucking the bog though. While all the other cryptos are down today, only Litecoin is in the green.

This could be due to the recent announcement that

After all, why not?

Peer-to-peer transactions are gaining prominence on the street and integration with traditional financial firms is the logical next step.

Their choice to participate in the German banking services makes complete sense, especially given the crypto-friendly regulation there.

The price of Litecoin saw a few really great days in early December, but since then has been beaten down more than the rest. Certainly, it might go lower, but at $76 per coin, it’s definitely not at the highs.

Let’s have an amazing day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. 

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: http://etoro.tw/Mati
Twitter: https://twitter.com/matigreenspan
LinkedIn: https://www.linkedin.com/in/matisyahu/
Telegram: https://t.me/MatiGreenspan


Images courtesy of eToro

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Čvc 10

Price Cycles of Past & Future

Ran into this article over the weekend. The piece was extremely well written and resembles a lot of the stuff being published today. Though in retrospect, I think the question posed in the headline has been answered with a resounding affirmative.

Can Bitcoin recover?

For more insight into Bitcoin’s price action over the last few years,  here is an article I’ve published in the Global Banking & Finance Review.

And if you want to understand more about the future of cryptocurrency transactions in the real world, please also check out this article from our UK Managing Director in The Telegraph.

Enjoy!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Football is driving the Pound
  • Is a Recession Coming?
  • New Crypto Products

Please note: All data, figures & graphs are valid as of July 9th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

As England advances in the World Cup, it seems the country has taken a step back on Brexit. Prime Minister Theresa May’s plan hasn’t been received as well as she would’ve liked. Her Foreign Secretary even likened the plan to a “polished turd,” but it seems he is now behind it.

Unfortunately for May, some critical players did not get behind it, namely the Brexit Secretary David Davis and two of his associates. With just 8 months until the March 2019 deadline, it’s looking like there will be difficult times ahead.

The Pound Sterling is seemingly unphased by all of this. Not only did it open the week with a notable gap up (purple circle), but it has continued to climb throughout the morning.

eToro - GBPUSD price chart

In fact, the British Pound has been one of the best performing currencies so far this month as the US Dollar is seeing a bit of a pullback.

USD chart - eToro

It will be interesting to see the Pound’s reaction to the game on Wednesday night. So far, the games have certainly had an impact on the mood in London, which seems to be having a bigger impact on the markets than Brexit.

The blue circle on the GBPUSD chart above is the game between England and Colombia, the victory of which secured their position in the quarter-finals. The game against Sweden happened when the markets were closed for the weekend, which might explain the weekend gap mentioned above (purple circle).

US Signs of Recession

Watching the stock markets these last few months has been like watching a game of tennis, only instead of side to side, it’s been more like up and down. Ever since the big drop at the beginning of February, the Dow Jones has been rather random with cycles of about 1000 points in either direction but going nowhere fast.

eToro - DJ30 price chart

Markets are moving upwards today, especially in Asia as the China50 scored 3.46% this morning.

Meanwhile in the United States, one of the oldest indicators of economic instability is inching closer to a bad omen.

As we discussed in an update from June 27th, the spread between the yields of the 2-year and the 10-year treasury bonds has been getting very narrow. At the time, it was as low as 34.24 basis points.

Today, that number has fallen below 30 basis points for the first time since 2007.

eToro - US 2 to 10 year treasury yield curve

If the number goes negative, that is a clear sign that investors are more worried about what might happen in the short-term than they are about the long-term market stability.

Now for Crypto

The crypto markets have been pretty calm over the weekend with prices showing excellent signs of stability over the last few weeks. The next hurdle for bitcoin is a psychological resistance at $7000.

eToro - Bitcoin price chart

Also in crypto news today…

eToro - Bitcoin ETF

No doubt, if the CBOE gets approval for a bitcoin-based ETF it will be yet another way for Wall Street traders to gain liquidity on the world’s favorite digital asset.

However, the volumes on the crypto-products already offered by CBOE and CME are still quite low. Having an additional product won’t necessarily open the floodgates, but what it will do is improve the situation during the next price surge.

Let’s have an amazing week ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. 

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: http://etoro.tw/Mati
Twitter: https://twitter.com/matigreenspan
LinkedIn: https://www.linkedin.com/in/matisyahu/
Telegram: https://t.me/MatiGreenspan


Images courtesy of eToro

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Čvc 08

South Korea Moving Towards Cryptocurrency Acceptance

South Korea is continuing to legitimize and embrace cryptocurrency through a careful and considered approach.


‘The regulator isn’t opposed to cryptocurrencies’

On May 19, Bitcoinist reported that Korean regulators had agreed to apply the G20’s set of “unified regulations” in regards to cryptocurrencies. South Korea’s Financial Supervisory Service (FSS) stated at that time:

It’s almost certain that cryptocurrencies will be classified as assets and the main issue will be centered on how to regulate them properly under the unified frame that will be agreed upon between G-20 nations. Given the current stance, this isn’t good, but we will step up efforts to improve things.

Now, The Korea Times has reported that the country’s regulators are indeed set to ease regulations regarding cryptocurrencies — as the Financial Services Commission (FSC) has revised its guidelines for cryptocurrency exchange operators.

One official told the oldest English-language newspaper in South Korea:

The FSC made revisions to its rules to apply strengthened policies in order to prevent or detect money laundering and illegal activities because the regulator isn’t opposed to cryptocurrencies.

Another official stated:

Establishing unified rules is a complicated issue given the broader range of assessments between government agencies. This is why the country needs close international cooperation as it is still in the early stages of fine-tuning guidelines.

How Icon (ICX) and Others Skirt South Korean Restrictions

The government’s stance and actions thus far indicate an interest in encouraging blockchain technology and the growth of cryptocurrencies, but not at the expense of safety and security. Stated one trade ministry official:

Any major reversal in policies is unlikely, but the government seems to believe a gradual shift in attitude toward crypto-based assets is needed. What regulators should do is figure out how to regulate them properly and prudently as Korea needs to put more emphasis on blockchain technology after obtaining knowhow and understanding of the possible flipside of cryptocurrency trading.

‘Interest in cryptocurrencies will double’

The report comes shortly after South Korea moved to recognize cryptocurrency exchanges as legal entities in their own right for the first time, cementing their position in the local economy.

Seoul-based technology journalist Kim Byeong-yong also told The Korea Times that mainstream adoption is likely coming to South Korea in the future, explaining:

Global banks predict that interest in cryptocurrencies will double. We believe an increase in adoption will come when crypto-assets can be used as actual currencies rather than just speculative investments.

What do you think about South Korea’s regulatory stance regarding cryptocurrencies and blockchain technology? Do you think mainstream adoption is in the cards? Let us know in the comments below! 


Images courtesy of Shutterstock, Bitcoinist archives.

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