At the beginning of the week, the cryptocurrency market continued to correct downwards. Currently, Bitcoin is trading near 7500.00 (−14.2%), Ethereum – at 155.00 (−18.8%), Ripple – near 0.2370 (−11.3%). The Tether coin is trading at 1.0054 (−0.04%), outperforming Bitcoin Cash in terms of capitalization and pushing it to fifth place. BCH is currently trading at 218.75 (−18.2%). The total market capitalization during the week decreased from 234 to 205 billion dollars. Bitcoin’s market share rose to 66.3%.
In general, the market continues to be pressured by long-term negative factors, which are counteraction by state regulators and the launch of new state digital currencies. Also, investors are disappointed by the position of China, whose authorities declare the need to take a leading position in the blockchain industry, but continue to struggle with the digital market. Last week, Chinese social network, Weibo, blocked Binance and Tron accounts, and the government issued a notice calling for the cessation of cryptocurrency trading services. Finally, rumors that the police raided the Shanghai office of the Binance stock exchange, after which it was closed and employees were forced to work from Singapore, acted as a short-term catalyst for lowering prices this week. Representatives of Binance later denied these rumors, saying that the company does not have an office in Shanghai at all, but this did not neutralize the negative effect.
One should also note the comments of the Fed head Jerome Powell, who commented on the creation of state cryptocurrency in the United States. He acknowledged that the study of such an opportunity is underway, but again expressed doubts about the advantages of launching a national cryptocurrency, since the US payment system is already quite innovative and provides consumers with a sufficient number of payment options. In addition, the introduction of a national digital asset will create a host of legal issues and will require additional security. The head of the Bank of Japan, Haruhko Kuroda, said that the regulator is also considering the option of launching a national digital asset if necessary, although now there are no such plans.
During the week, the US authorities continued to pressure the Libra project. A bill was submitted to Congress on Thursday, according to which the Libra stablecoin will be considered as a security, which will provide the authorities with new levers of pressure on the project. According to Congressman Lance Gooden, the bill will help investors better understand what assets they invest in. It is worth noting the comments of Ethereum co-founder Joseph Lubin, who stated that the appearance of a coin at a time when the cryptocurrency market was not yet closely monitored by regulators is its competitive advantage. One of the Bitcoin Cash creators, Roger Ver, announced the creation of Bitcoin Cash Ecosystem Fund with an asset size of USD 200 million, which will focus on investing in the creation of payment solutions that use the Bitcoin Cash blockchain.
Next week, the cryptocurrency market may stabilize or continue to decline.