Bitcoin prices on March 23 were fighting to reach $9,000 per coin.
Bulls talked about Bitcoin being a “transferrable value,” suggesting it could benefit from stock market weakness, but admitted prices are hitting “stiff resistance.”
All this is very interesting, except that two weeks ago Bitcoin was fighting for $10,000. During the first week of March it was steadily above $11,000.
And Bitcoin is the strongest of the cryptocurrencies. In addition to seeing prices in dollars, chartists are now showing prices of cryptocurrencies like Ethereum against those of Bitcoin. Ethereum coins that started the month at .08% of a Bitcoin are now down to .06% of one.
There are exceptions. An obscure coin called EOS is up after a company called Everipedia, backed by former billionaire Michael Novogratz, said it would “airdrop” the coins on owners of other cryptocurrency.
Who doesn’t like free money?
Regulators Close In
So what’s the reason for this decreased crypto market?
A number of countries are making real move toward regulation.
China is trying to stomp out the trade (and please don’t listen to stories of Chinese traders being unfazed by it). Japan is going after exchanges that don’t have local licenses to trade. All of this runs counter to the claims of cryptocurrency bulls who continue to insist that the 75% decline in alt-coins over the last two months is just a “purgatory” before a new bull run starting this summer.
The greatest confusion lies in one of the biggest cryptocurrency markets, South Korea.
It begins with a regulatory advocate being found dead in his home. It continued this month with financial regulators investigating the country’s banks over the use of cryptocurrency to launder money. North Korea has also been using cryptocurrency to get around sanctions and continue its nuclear weapons program.
So investors should expect more crackdowns.
Actually, Love Blockchain
As much as governments seem to hate Bitcoin and other cryptocurrency, that’s how much they now love blockchain technology.
Cryptocoins are seen by regulators as enabling money laundering. Blockchain is seen by the same regulators as ending it. It is seen as transforming supply chains because once a transaction is on the chain it stays there. China is looking to build a standard blockchain format that would enable all this.
A standard format might eliminate abuses of the Bitcoin blockchain discovered by German researchers, who examined 1,600 Bitcoin blocks and found 3 were text files with links to child porn on the dark web. This became “Bitcoin Blockchain Spreads Child Abuse” once the press got hold of it, yet another reason to dump cryptocoins.
The Bottom Line
Bitcoin and blockchain have been a wild west for several years, but the frontier is gradually being fenced-in.
Cryptocurrency will not be allowed to challenge government financial authority until lawless elements are driven from it. Blockchain technology can help drive out such elements, just as it can enable them.
This isn’t going to be like the Internet, where cyber-libertarianism let things go without regulation for decades, until it elected a madman President of the United States. The cops are coming after Bitcoin, and other cryptocoins, with blockchain as one of their weapons, and that’s just the reality of the market.
Dana Blankenhorn is a financial and technology journalist. He is the author of a mystery novella involving Bitcoin, The Reluctant Detective Saves the World, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story, nor any cryptocurrency. To follow the value of cryptocurrencies bookmark https://coinmarketcap.com/
