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Fears of Regulatory Crackdown Flush $190 Billion Out of Crypto Market

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Bitcoin, Ethereum and every other major cryptocurrency collapsed on Tuesday, as fears of regulatory clampdown in South Korea triggered a mass exodus from the digital asset class. The collapse comes as mainstream media reports continue to push the idea of an imminent ban on cryptocurrency exchanges even as lawmakers cautioned no decision had been reached.

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Cryptocurrency Market in Free Fall

The cryptocurrency market declined rog $190 billion on Tuesday, marking one of the biggest single-day drops on record. At its lowest, the market was valued at $510 billion,  which was than $200 billion below its peak earlier this month.

The top 20 coins were each down in excess of 17%, according to data provider CoinMarketCap. Nearly $49 billion worth of cryptocurrency exchanged hands over the past 24 hours.

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Bitcoin plunged below $12,000, reaching its lowest level since early December. Ethereum, its biggest rival, fell back toward $1,000, while Ripple bottomed out at $1.23 after peaking above $3 just a few weeks ago.

South Korea Jolts Market

It was mainly regulatory issues that jolted cryptocurrencies on Tuesday, with South Korea mulling new legislation to stamp out excessive risk from the market.

South Korea’s finance minister Kim Dong-yeon reportedly told local radio that an all-out ban on cryptocurrency trading was a “live option, but that government officials still need to “seriously review it.” Seoul’s biggest issue with cryptocurrency trading is the level of speculation in the market and the role of anonymous accounts in spurring volatility. New regulations have already banned anonymous trading on domestic exchanges and barred foreigners from participating in the market.

Last week, some of South Korea’s busiest crypto exchanges were raided by police and tax agents over alleged tax evasion. The raids were confirmed by an employee at Coinone, who spoke to Reuters anonymously.

Seoul’s financial authorities had previously indicated they were investigating six banks that offer cryptocurrency accounts. In addition to speculative risks, authorities are also concerned about the link between cryptocurrency trading and organized crime.

South Korea is a major center for cryptocurrency and is home to some of the largest exchanges. Local traders have been the main catalysts behind some of the crypto market’s biggest gainers, including Ripple.

Some analysts believe that further regulatory crackdown will be ineffective given the borderless nature of cryptocurrencies. When China banned cryptocurrencies, traders there migrated their accounts offshore to Hong Kong or Korea. This suggests that a regulatory crackdown can only succeed with broad international cooperation, which does not exist at the time.

Chinese regulators know that their measures have done very little to limit virtual capital flight from the country. That’s why they are moving to block domestic access to offshore exchanges, according to a recent Bloomberg report.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 404 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Altcoins

Cryptocurrency Prices Approach One-Month Lows as Altcoins Plunge, Bitcoin Falls Below $8,000

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Crypto prices were down sharply at the start of Friday trading, with the total market capitalization falling $22 billion over the past 24 hours.

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Market Update

At the time of writing, cryptocurrencies were collectively valued at $361.6 billion, according to the latest data from CoinMarketCap. The asset class peaked above $391 billion roughly 20 hours ago.

Trading volumes slipped to roughly $18.8 billion, with Hong Kong and South Korean exchanges accounting for the largest share of total activity.

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Like previous declines, the bulk of the losses were concentrated in the altcoin class, allowing bitcoin to boost its market share to nearly 38%.

Bitcoin prices breached the $8,000 floor early Friday, with prices shedding 4.8% to $7,974.

In terms of percentage losses, IOTA was the worst performing cryptocurrency in the top-ten. The coin shed 13% to $1.67.

Bitcoin cash continued its post-fork decline, with prices shedding 9.1% to $1,183. BCH is currently trading near its lowest level in a month.

Ethereum prices declined 6.6% to $664. Ripple’s native XRP currency was down more than 7% at $0.658.

Cryptocurrencies are on track for their second consecutive weekly decline, with prices shedding nearly 14% from last Friday.

New Study Quantifies Bitcoin Mining Energy Consumption

The first peer-reviewed study examining bitcoin’s energy consumption was released Wednesday, and the results aren’t endearing.

Research that appeared in a monthly publication by Cell Press estimates that bitcoin mining consumes at least 2.6GW of power, which is equivalent to the entire electric power grid harnessed by the Republic of Ireland. The report, titled Bitcoin’s Growign Energy Problem, predicts that power consumption from mining could reach 7.7GW before the end of 2018. That’s roughly the same amount as electric that Austria currently requires.

Author Alex de Vries made it clear in his report that the numbers he is using are speculative given the decentralized and secretive nature of the mining industry. The paper shows that current energy consumption could be as low as 2.6GW if we factor in the latest and most efficient mining hardware from Bitmain.

The so-called energy problem associated with bitcoin is expected to become more cumbersome as the network’s size increases. Some have speculated that mining could account for 5% of global energy consumption in the future.

Globetrotting crypto miners are constantly on the look out for the best energy deals, especially in the wake of China’s ban on the practice. Interestingly, several countries have stepped forward to highlight their favorable energy policies toward miners.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 404 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Altcoins

Altcoins Lead Crypto Market Recovery as Consensus Summit Draws to a Close

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Cryptocurrencies rose in overnight trading Thursday, as altcoins rebounded from a double-digit slump on the heels of the biggest blockchain summit of the year.

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Altcoins Lead Recovery

All major crypto assets reported gains Thursday, clawing back nearly $18 billion in lost market cap from the previous day’s low. At press time, the combined value of all digital currencies in circulation was $389.3 billion, according to data provider CoinMarketCap. Market prices bottomed near $372 billion on Wednesday.

EOS and Tron were among the biggest gainers percentage-wise. EOS added more than 10% to $13.75, while Tron gained 11.1% to $0.073. Both currencies were down sharply earlier in the week.

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Ripple XRP gained 4.5% to $0.711 and Ethereum rose 3.1% to $712.81.

Bitcoin cash also rebounded from a series of volatile moves after a hard fork upgrade increased the protocol’s block size to 32MB from 8MB. The value of BCH rose nearly 4% to $1,324.63.

Bitcoin prices gained 1.3% overnight to trade at $8,406.51. Its total share of the crypto market weakened to 36.8% after reaching 37.3% just a few hours earlier.

Positive Developments from the Blockchain Industry

The crypto market’s weak performance this week has masked an outpouring of positive developments from the blockchain industry.

On Tuesday, Hacked reported four key developments related to institutional adoption, innovation and the apparent vindication of South Korea’s Upbit exchange following an audit of its records by local accountants.

Positive news kept coming mid-week after Square Cash leapfrogged PayPal’s Venmo digital wallet in terms of downloads. This is an important development for crypto traders as Square Cash allows transactions in bitcoin.

Square Cash has been downloaded roughly 28 million times, which is just 1 million below Venmo’s levels, according to analyst Dan Dolev.

In a note to clients, Dolev issued the following statement:

“With Square Cash App now open for bitcoin trading in most states, comparing its growth versus the popular Coinbase app is noteworthy. Here, while Coinbase saw growth peak around the holiday time — as bitcoin prices spiked — Coinbase’s growth has slowed from record levels, whereas Square Cash App experienced more balanced growth.”

Meanwhile, a start-up company backed by Goldman Sachs has announced plans to mint its own dollar-pegged cryptocurrency. USD Coin, as it will come to be known, will allow users to more easily pay for goods and services through cryptocurrency.

Circle, the company behind the project, will begin work on the new coin this summer.

The fourth and most successful Consensus summit wrapped up in New York on Wednesday. One of the key takeaways from this year’s event was the warm reception from U.S. regulators toward digital currency technology.

In a Wednesday panel that included Commodity Futures Trading Commission (CFTC) enforcement director James McDonald and Securities and Exchange Commission (SEC) cyber chief Robert Cohen, regulators said they did not want to hinder blockchain innovation. Although the panelists did not represent their respective agencies during the discussion, their openness to blockchain technology is a step in the right direction for crypto investors still weary of government intervention.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 404 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Altcoins

Cryptocurrencies Plunge $23 Billion as Consensus Summit Fails to Provide a Boost

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Cryptocurrency prices slumped further into the red on Wednesday after a high-profile blockchain summit failed to spark a sustained recovery.

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Crypto Prices Sink

Measured by market capitalization, cryptocurrencies are down roughly $23 billion on Wednesday.

The combined value of all currencies is currently hovering around $380.4 billion, according to data provider CoinMarketCap. Market valued had peaked above $411 billion on Tuesday. Daily trade volumes came in at $21 billion, based on a 24-hour window.

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Bitcoin’s share of the decline was smaller relative to its altcoin peers. The value of BTC fell 4.3% to $8,341, though its share of the total market climbed back above 37%.

Within the top-ten, EOS was the worst performer percentage-wise, falling 11.3% to $12.52.

Bitcoin cash plunged 9.2% to $1,288.20 after a hard fork upgrade increased the protocol’s block size to 32MB from 8MB. The hard fork was initiated through the Median Time Past (MTP) methodology, meaning it went live on the next block following the MTP timestamp of 1526400000.

Ethereum prices were down nearly 5% at $694.15. Ripple’s XRP currency also fell 8% to $0.681.

Consensus 2018 Drawing to a Close

Bitcoin and other digital assets began the week on a positive note as Consensus 2018 drew thousands of blockchain enthusiasts to New York.  The three day event, which began Monday, has been a major boon to cryptocurrency prices the last three years. For example, bitcoin prices surged between 10% and 69% during the last three Consensus conferences.

However, prices this week have failed to keep up with the historical trend, with bitcoin values barely treading water since the conference began. Analysts, including Tom Lee of Fundstrat Global Advisors, had predicted huge price gains on the heels of Consensus 2018.

“We expect the Consensus rally to be even larger than past years,” Lee said in a note to clients ahead of the conference, which concludes on Wednesday.

Though the event has failed to live up to its hype from a price perspective, it’s important to bear in mind that the vast majority of “post-Consensus” gains occur long after the summit has taken place. In fact, the bulk of the rally is usually generated over a two-month period after the conference.

The sharp drop in market prices may partially reflect overhang from last week’s raid of Upbit, one of South Korea’s largest digital currency exchanges. The exchange was apparently cleared of any wrong doing Tuesday after local accounting firm Yoojin found no evidence of fraud following its audit of the firm. Regulators and local police are expected to conclude their investigation this week.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 404 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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