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Can Longing Bitcoin and Shorting Oil Be a Viable Trade for 2020?

Bitcoin has made further progress over the weekend in a move back to resistance at $8,600. Gold prices moved upwards also but this time oil went in the opposite direction, could this be a sign of things to come?

Bitcoin Safe Haven Redux on Virus Fears
Bitcoin has made around 5% since the weekend started and is back at resistance at $8,600. The move coincided with the escalating fears of the Chinese Coronavirus spreading globally, which is causing widespread disruption across the world.

The Chinese yuan has fallen and stock markets across Asia are in retreat as travel restrictions come into force and the number of infected rises.
Regional markets in China remain closed for the Lunar New Year but Japan’s Nikkei 225 index sank 2%. India’s Sensex also lost ground and

Thailand’s SET fell 3% on the fear of a wider impact on tourism where Chinese travellers dominate.

According to reports Hong Kong closed major attractions over the weekend and Taipei said it was barring almost all visitors from China.

Oil Also Falling
Unlike when geopolitical tensions mounted in the Middle East, oil prices took a hit today. According to Reuters, Saudi Arabia is closely monitoring developments in global oil markets resulting from ‘gloomy expectations’.

Crude prices fell over 2% on Monday hitting lows not seen for several months. The primary fear is a failure to contain the outbreak could have a wider impact on global markets including oil and commodities.

Saudi Arabia’s Minister of Energy, Prince Abdulaziz bin Salman, likened the reaction to the SARS outbreak seventeen years ago when there wasn’t immediate pressure on oil prices.

Such extreme pessimism occurred back in 2003 during the SARS outbreak, though it did not cause a significant reduction in oil demand,
He added that he was confident the Kingdom and other OPEC members have the capability and flexibility needed to respond to any developments. The group has been reducing oil supply to support prices and has agreed to make further cuts in March.

The oil slide was not missed by Three Arrows Capital CEO, Su Zhu, who suggested that longing BTC and shorting oil could be the trade of the 2020s.

Conversely, gold prices are back up in tandem with bitcoin, as the safe haven narrative strengthens once again. Analysts have been eyeing $1,600 again as a Federal Reserve meeting on interest rates approaches this week.

For the second time this year, in two completely different circumstances, bitcoin has reacted like a store of value asset to adverse news. Whether it is conversely linked to oil prices remains to be seen but it is likely that the flow of the latter will be manipulated to keep prices stable.

The post appeared first on Bitcoinist.com.

Source: Bitcoininst

Ethereum Price Analysis: ETH Looks Primed To Test 200EMA Resistance At $173

  • Ethereum went through a 3% price increase over the past 24 hours after rebounding from support at the 100-days EMA.
  • Against BTC, ETH has turned away from the resistance at the 100-days EMA and looks to trend lower with a bearish crossover signal on the Stochastic RSI.
  • Ethereum has survived from dropping beneath the $158 level as it looks to re-test the 200-days EMA at $173.

Key Support & Resistance Levels

ETH/USD

Support:  $165, $158, $145, $133.50.

Resistance: $174, $181, $186, $193.50.

ETH/BTC:

Support: 0.0191 BTC, 0.019 BTC, 0.0188 BTC, 0.0185 BTC.

Resistance: 0.0195 BTC, 0.020 BTC, 0.0204 BTC.

ETH/USD: ETH Rebounds From .382 Fib Support, Will We Break The 200-Days EMA On The Re-Test?

ethusd-jan27

Since our last analysis, ETH rebounded from the support provided by the 100-days EMA and the short term .382 Fibonacci Retracement level. This has prevented it from sliding into a short term bearish trend as it looks to turn bullish with a break above the 200-days EMA at $173. Before this can happen, Ethereum must break above resistance at $170.

Ethereum remains in a short term bullish condition after rebounding from the 100-days EMA support. For this bullish trend to extend over the next few weeks, ETH must break the resistance at the 100-days EMA and clear the January high at $178. If ETH were to drop beneath $158, it would turn neutral with a further drop beneath $145, turning the market bearish once again.

Ethereum Short Term Price Prediction

If the bulls can continue to bring Ethereum up above $170, resistance can initially be expected at $170 and then at $173, which is provided by the 200-days EMA and bolstered by the long term bearish .5 Fibonacci Retracement level. Above $174, resistance lies at $178, $181, and $185 (long term bearish .618 Fib Retracement level). On the other hand, if the sellers regroup and push Ethereum lower, support is located at $165 and $158 (100-days EMA & .382 Fib Retracement). Beneath this, support lies at $156, $152 (.5 Fib Retracement), and $146 (.618 Fib Retracement).

The RSI managed to rebound strongly at the 50 level, which is an indication that the bulls are still not ready to give up control over the market momentum. Furthermore, the Stochastic RSI recently produced a bullish crossover signal in extremely oversold conditions, which signal that a bullish push higher could be imminent.

ETH/BTC: ETH Struggles At 100-days EMA and Forms Ascending Triangle Pattern

ethbtc-jan27

Against Bitcoin, ETH did not retrace toward the .382 Fib support as expected. Instead, it rebounded from support at 0.0191 BTC, which caused it to rise back into resistance at the 100-days EMA at around 0.0195 BTC. The cryptocurrency has been struggling with this level all month and has turned away from here again.  

Ethereum is currently trapped within a period of consolidation as it trades within an ascending triangle pattern. This means that it is now neutral. To turn bullish, Ethereum must rise above the resistance at the 100-days EMA and break the upper boundary of the triangle. 

Ethereum Short Term Price Prediction

If the sellers push ETH lower against BTC, the first level of support is located at 0.0191 BTC. Beneath this, support lies at 0.019 BTC (lower boundary of the triangle), 0.0188 BTC (.382 Fib Retracement), and 0.0184 BTC (.5 Fib Retracement). On the other hand, if the bulls somehow manage to break the strong resistance at the 100-days EMA, resistance above is located at 0.0196 BTC, 0.0201 BTC (1.272 Fib Extension), and 0.0204 BTC (1.414 Fib Extension).

The RSI is falling slightly but remains above the 50 level, which is a promising sign for the bulls. However, if it breaks beneath 50 during this retracement, things could get ugly for Ethereum holders. Furthermore, the Stochastic RSI recently produced a bearish crossover signal, which shows that the bullish pressure is fading.

The post Ethereum Price Analysis: ETH Looks Primed To Test 200EMA Resistance At $173 appeared first on CryptoPotato.

Source: Crypto Potato

Ripple Price Analysis: XRP Falls Below 100EMA As Bulls Try To Defend

  • XRP decreased by 7% this week, which brought the coin back beneath the 100-days EMA.
  • Against BTC, XRP dropped into the support at the 2600 SAT level.
  • XRP has found strong support at the .5 Fibonacci Retracement level.

Key Support & Resistance Levels

XRP/USD

Support:  $0.218, $0.209, $0.1850 

Resistance: $0.2283, $0.234, $0.25.

XRP/BTC:

Support: 2600 SAT, 2350 SAT, 2455 SAT.

Resistance: 2710 SAT, 2800 SAT, 2900 SAT.

XRP/USD: XRP Holding Support at .5 Fib Retracement 

xrpusd-jan26

Since our last analysis, XRP went on to rise above the 100-days EMA. However, it found resistance at $0.25, which caused it to roll over and drop back beneath this level. It continued to fall until finding support at the short term .5 Fibonacci Retracement at around $0.218.

XRP has returned into a neutral trading condition after retracing below the $0.2345 level. It will need to make fresh ground above $0.26 to be able to be considered as bullish on the next push higher. If XRP were to continue to fall beneath the $0.20 level, the market could be considered as slightly bearish.

XRP Price Short-Term Prediction

If the bulls can defend the current support at $0.218 and rebound, initial resistance lies at $0.228 and $0.234 (100-days EMA). Beyond this, resistance is expected at $0.24 and $0.25 (1.272 Fib Extension). On the other hand, if the sellers push the market beneath $0.218, support lies at $0.209 (short term .618 Fib Retracement), $0.203 (downside 1.618 Fib Extension), and $0.19. 

The RSI dipped beneath the 50 level but is battling to break back above. It currently indicates indecision within the market, meaning it could still head in any direction. Fortunately, the Stochastic RSI is in oversold conditions and is primed for a bullish crossover signal that should send the market higher.

XRP/BTC: XRP Remains Supported By Sideways Range At 2600 SAT

xrpbtc-jan26

Against BTC, XRP continues to be supported at the 2600 SAT region, which has prevented the market from dipping lower during January (besides a brief drop to 2540 SAT). It remains trapped within the range from 2600 SAT to 2710 SAT and must break this range to dictate the next direction it would like to head toward.

As we are trading in a range, XRP remains neutral at this moment in time. However, if it drops beneath the support at 2530 SAT, the market would turn bearish and should head toward Septemeber 2019 lows. To turn bullish, XRP must rise and break above the 3100 SAT level to clear the 100-days EMA and the December highs.

XRP Price Short-Term Prediction

Toward the upside, the first level of strong resistance lies at 2710 SAT. Above this, resistance is expected at 2800 SAT, 2900 SAT(100-days EMA), and 3000 SAT. Alternatively, if the sellers push XRP beneath 2600 SAT, support lies at 2530 SAT (.886 Fib Retracement), 2455 SAT, and 2400 SAT.

Likewise, the RSI has dipped beneath the 50 level but is battling to break back above. The momentum is indeed flat, and XRP must rise well above the 50 level to begin any form of recovery. 

The post Ripple Price Analysis: XRP Falls Below 100EMA As Bulls Try To Defend appeared first on CryptoPotato.

Source: Crypto Potato

Bitcoin Price Analysis: Bitcoin Holds The Crucial Support Line, Preparing For a Huge Move This Week

After touching the significant 200-days moving average line at $9,060, Bitcoin quickly got rejected down to $8400. From there, the cryptocurrency had a three-day consolidation around $8600; however, after breaking it down, the bearish momentum had recorded $8200 as the weekly low.

Coincidence? When looking at the following 4-hour chart, we can see that the past month’s price move is reflected on the marked ascending channel accurately, whereas the $8200 is the lower boundary of the channel.

Bitcoin found support there, along with the 38.2% Fibonacci retracement level from the daily chart (~$8300). As of writing these lines, Bitcoin is slightly making its pace above, currently dealing with the support turned resistance level of $8400 – $8460 (as a reminder the last was the low of the past week, which was tested four times before got broken down).

Keep in mind that it’s still the weekend, and it’s also the Chinese New Year. As we mentioned before, the holiday tends to be bearish for Bitcoin.

With some caution, as mentioned here in the latest price analysis, the correction is so far healthy, as long as Bitcoin respects the marked ascending channel.

Total Market Cap: $231.7 billion

Bitcoin Market Cap: $153.2 billion

BTC Dominance Index: 66.0%

*Data by CoinGecko

Key Levels To Watch & Next Targets

– Support/Resistance levels: As mentioned above, Bitcoin is retesting the $8400 – $8450, but now as resistance.

In case of a break-up, then the next target for Bitcoin is likely to be the $8600 price area, which also contains the 4-hour MA-50 (the pink white line). Further above lies $8800 and $8900, which includes the significant 200-days moving average line (marked by the light green line on the following daily chart).

From below, the first level of support is the Fib level of $8300, along with the lower descending trend-line, which builds-up the ascending channel. Further down lies the weekly low at $8200, before reaching to the $8000 area, which contains the 100-days moving average line (white line).

– The RSI Indicator: As mentioned here in our previous analysis, the momentum indicator found support above the 54-55 RSI level.

A bullish sign might be coming on behalf of the Stochastic RSI oscillator. The last is about to go through a cross-over at the oversold territory.

– Trading volume: The volume is relatively low over the past days, this can be explained by the Chinese Holidays.

BTC/USD BitStamp 4-Hour Chart

btc_jan26_4h-min

BTC/USD BitStamp 1-Day Chart

btc_jan26_d-min

The post Bitcoin Price Analysis: Bitcoin Holds The Crucial Support Line, Preparing For a Huge Move This Week appeared first on CryptoPotato.

Source: Crypto Potato

Tim Draper: Millennials Should Invest In Bitcoin

After last week’s rally, it now seems that Bitcoin is hitting the headlines once again. 

American venture capital investor, Tim Draper, has recently spoken out about Bitcoin, suggesting that millennials need to invest in Bitcoin if they want to secure their financial future. 

On Wednesday, January 22nd, 2020, Draper spoke to Liz Claman during an interview. While the discussion touched on other topics, such as Elon Musk and SpaceX, it ended with some sound advice coming from one of the world’s most popular investors.

Why Millennials Need Bitcoin

According to Draper, millennials are standing at a point in history, where they have the whole future of the world’s financial system ahead of them. 

But the biggest problem, Draper says, is that millennials have inherited a system from previous generations that just simply no longer work for today’s generation. 

He even goes so far as to compare today’s economic landscape to an antiquated vehicle, stating during the interview that, “our banking system is the Oldsmobile, is the old Oldsmobile.”

According to Draper, putting money away, one penny at a time, to save for retirement is no longer working for millennials. He goes on to say that they are being born into a world already in debt. And beyond that, today’s salaries simply don’t allow young people to be able to pay off the debt. 

In other words, Draper believes that millennials have, “become renters rather than buyers because they have to”, and not because they want to. 

How Safe is Investing in Bitcoin?

While some financial experts, such as Draper, believe young people should be investing in Bitcoin, not everyone agrees. 

In fact, the entire cryptocurrency industry has been plagued by constant skepticism ever since Bitcoin was initially launched back in 2009. And back in 2018, American economist, Nouriel Roubini, spoke out about cryptocurrency stating that they were, “the mother of all scams”, leaving countless observers wondering if there is any legitimacy behind Bitcoin at all.

And it’s also important to note that cryptocurrencies are known to display extremely volatile behavior. In fact, cryptocurrencies have shown an average volatility reading of 63% in the last 6 months alone..

Draper ended his interview with Fox by asking a deep question to millennials: “What’s the future going to look like? It’s not going to be tribal anymore. It’s going to be global. It’s not going to be tied to geographic borders. It’s going to be open.”

With that said, Bitcoin is currently the world’s largest cryptocurrency with a total market cap of $157.5 billion. It is down -3.3% in the past 24 hours and is currently trading at $8,344.47. 

Featured image courtesy of Business Insider

The post Tim Draper: Millennials Should Invest In Bitcoin appeared first on CryptoPotato.

Source: Crypto Potato

New European Blockchain Association Called ADAN

“Association pour le Développement des Actifs Numériques” (ADAN) is an association that will represent the blockchain industry before the authorities in France and Europe. “The Association for the Development of Digital Assets” was announced on January 14th, 2020 through a press release on the official ADAN website.

Its job will be to represent the European blockchain industry, by bringing players together and contribute to their progress and development, by communicating with public authorities and the industry; By taking a position regarding industry-specific topics, and by accompanying all members through meetings and the facilitation of synergies through a support program. Legal expert Simon Polrot is the President of the Association and the initial members of the association are these following 11 blockchain companies:

  1. Ark Ecosystem,
  2. Blockchain Partner,
  3. Coinhouse,
  4. Coinhouse Custody Services,
  5. ConsenSys France,
  6. iExec,
  7. Kaiko,
  8. Ledger,
  9. LGO Markets,
  10. Nomadic Labs,
  11. Woorton

Depending on your experience and knowledge of the European blockchain industry, you are aware of these companies and their products and services. ADAN wants to lead the public debate that will hopefully result in an increase in blockchain innovation in the European marketplace.

The association feels that Europe as a whole is lagging behind the rest of the world when it comes down to blockchain and digital assets i.e. cryptocurrencies. According to the press release, the association’s work will involve establishing the supervision of digital asset service providers under the human rights law established in France in May last year, PACTE.

They will also raise awareness about existing industry solutions, will push for improvements to legal and tax governments, and provide awareness and support to public authorities for measures that will support the development of a Europe-based, yet international blockchain industry.

ADAN represents a big promise and a significant social and political influencer within the European blockchain industry. It’s too early to say, but depending on the dedication of the association they may end up being critical to the implementation of realistic laws, subsidies, and union-level blockchain platforms. Indeed, the dedication of these companies is not at all in question, if not all, some of them have existed for more than five years, making them a blockchain veteran. Their presence in this association is a comforting indicator that showcases that ADAN is here to stay and work on blockchain integration.

Europe is indeed behind in the global blockchain discussion on a governmental and union level. Many individuals and companies have already been established, but comparably to the USA and Asia, there is no significant drive to pursue a wholesome blockchain integration. The association will further publicize their establishment by organizing an event in Paris where they will discuss Europe’s opportunities with Digital Assets. For more information, refer to the press release.

Source: Crypto News

Tesla Vs Bitcoin: Which One You Should Hold by 2025?

Bitcoin is regarded by many as the world’s top performing asset class, but the king of crypto might have an unexpected competitor in the face of Tesla stocks (TSLA), as is market cap breaks $100 billion today.

Tesla Becomes First Publicly Listed US Carmaker to Cross $100B Mark
On Wednesday, the share price of Tesla enjoyed another significant rally amid a general bullishness in the US stock market. The stock has gained over 8% since the opening of the session, with the market capitalization crossing the $100 billion mark for the first time in its 17 years history. Thus, Elon Musk’s company became the first publicly traded American carmaker to cross that line, currently fluctuating at around $103 billion.

Tesla stock, listed on NASDAQ with the ticker TSLA, is trading at $592.11 right now, and it’s still surging. The share price started the year at $430, suggesting that the year-to-date return is over 35%. For comparison, Bitcoin has increased by 20% for the same period.

Now Tesla is valued more than Ford and General Motors combined. The company has already surpassed Volkswagen as the second-largest carmaker by market capitalization in the world. The next target is Toyota, which is by far the largest auto manufacturer, with a market value slightly over $200 billion. But, according to a Wall Street analyst, that is achievable in the coming years.

Pierre Ferragu of New Street Research said that Tesla’s price target for the next 12 months is $800. By 2025, Tesla might become the largest carmaker in the world. The company will be able to deliver up to 3 million cars per year during the next five years, which help its stock surge to $1,100 or even $1,700. This suggests a market cap between $250 and $530 billion.

Can Bitcoin Keep the Pace?
Tesla’s rally began in June last year, while Bitcoin started in the spring. In the last six months, Musk’s company has gained over 130%, while Bitcoin has a negative return. For 2019 as a whole, Bitcoin almost doubled, while Tesla gained over 40%.

However, TSLA seems to be on fire right now and can update the peaks amid ongoing optimism. The market values of both assets are also comparable, with Bitcoin’s total capitalization keeping above $150 billion.

Last week, we reported that ARK Invest CEO Cathie Wood voiced a bold prediction for Tesla, anticipating the stock price to surge to $6,000 in the next five years, which will make it a trillion-dollar giant. In this scenario, Bitcoin might lose the competition if it doesn’t stick to the price-performance predicted in the stock-to-flow model, which sees the asset breaking 6 figures in the near future.

It remains to be seen whether Wood’s scenario will work, but the certain thing is that the race between these assets will be interesting to watch over the next 5 years.

The post appeared first on Bitcoinist.com.

Source: Bitcoininst

Bitcoin Won’t Drop Below $7k Again In Our Lifetime: Cane Island

Bitcoin ‘Never Look Back Price’ proponent, Timothy Peterson of Cane Island Alternative Advisors, has been talking to Bitcoinist about where he feels Bitcoin price is currently, and how far it will ‘never look back’ to.

Never Look Back Price
The ‘Never Look Back Price’ is essentially the last time that bitcoin was at a particular price level. After that point it only went up, and never again dropped below that price. The current NLB price will always be the current price, however if the price drops back down again, then that new lowest price will be retrospectively applied to what is now the current NLB price.

By definition the NLB price can only go in one direction, otherwise the price will have looked back, and all previous higher levels will be wiped.

Bitcoinist first reported on the NLB price back in October last year, and there is a fuller explanation in that article.

Ignoring Bubbles, Long-Term Gains Are Incredibly Steady
What is perhaps most remarkable about the NLB price is the uniformity of the graph it produces, plotted against the square root of time.
The NLB price smoothes out any bubbles, spikes, or other phenomenon, and gives an indication of the steady, long-term gains over the lifespan of bitcoin so far.

Peterson recently tweeted, noting that the NLB price had been “flirting with the lower bound lately,” at what he believes is its true “fair” value. While NLB price usually drops a little below this value, it does suggest that we should expect some upwards pressure in the near future.

Peterson predicted an NLB price of $10k by this August.

How Low Can Bitcoin Go Between Now And August?
So how low could we retrace in the meantime? What is the ‘never look back price’ that we have confidently reached and will never look back to.

Who better to ask than Peterson himself? So we did, and this was his reply:

Based on my research, which looks entirely at fundamentals, I don’t think bitcoin has much chance of dropping below $7,000 – ever. At least not in our lifetimes.

So, that would seem to be a confident prediction that we have already reached an NLB price of $7k. Peterson’s analysis also recently suggested that the Grayscale GBTC gap had to close, just before it did, so we’ll just have to wait and see whether he is right again this time. Looking back at his earlier predictions, so far Peterson has been incredibly accurate.

Last year, he predicted in March that Bitcoin would close the year at around $7,800, which, as we now know, was incredibly close to the mark. In fact, Bitcoin’s price mean price throughout December was around $7,400.

The post appeared first on Bitcoinist.com.

Source: Bitcoininst

Ripple Price Analysis: XRP Stagnates Above $0.23 As Bulls May Be Running Out Of Steam

  • XRP trades in a rising channel as buyers wait for a bounce.
  • The third-largest crypto is currently down by 0.24%.
  • XRP is footing a bearish sentiment across its trading pairs.

XRP/USD: XRP Showing Bearish Sign But Channel Keeps Buyers Valid

Key Support Levels: $0.23, $0.225

Key Resistance Levels: $0.24, $0.251

Following last weekend’s sharp drop to $0.225, Ripple’s XRP has seen a mild recovery to around $0.24 over the last 48-hours. But at the time of writing, XRP is showing weakness with about 0.57% losses. The trading volume has also dropped to around $1.584 billion at the moment.

Technically, the XRP supply appeared to be turning heavy. If statistics continue to gauge weakness in price and volume, we can expect the sellers to reiterate the sharp move that we saw over last weekend. This scenario could cause a notable loss for XRP if sellers step back in the market. 

But if the price can maintain the short-term channel pattern, we can expect the price to bounce back. As of now, XRP is technically bullish.

XRPUSD - 1H Chart - January 22
XRP/USD. Source: TradingView

Short-Term Price Analysis

Zooming into the hourly chart, XRP is currently trading in a rising channel that was forming since January 20. The price has reached the channel’s support and, at the same time, respecting the grey-dotted regression line that was drawn from January 18 high. If this channel holds, we should see XRP bouncing back at $0.24 and $0.251 resistance.

A channel breakdown, however, could lead to serious selling pressure in the market. The level of support to watch for such a move is $0.23, followed by $0.225. However, we can see that the RSI and the MACD indicators are looking bearish at the moment. We should expect a sharp move once the price drops.

XRP/BTC: XRP is Waiting For Fractal Move As Bullish Sentiment Remain on Hold

Against Bitcoin, XRP has witnessed a significant increase over the past two weeks of trading. At the time of writing, XRP is trading at around 2712 SAT price level; following a small drop from 2786SAT level today. Meanwhile, the market has been following a bullish sentiment since mid-month.

However, the bullish bias is supported by 2550SAT price levels. XRP is currently sitting at the channel’s support. We can expect the market to keep respecting this rising channel on the four hours chart. If the price fails to respect this channel, XRP is most likely to follow a bearish sentiment.

XRPBTC - 4H Chart - January 22
XRP/BTC. Source: TradingView

Short-Term Price Analysis

As we can see on the 4-hours chart, XRP is looking bullish at the moment. Although the price is testing the lower boundary of the channel, we can expect the price to climb back shortly. 

While anticipating a bounce, the critical resistance to keep in mind is 2786SAT and 2843SAT levels – above the grey falling trend line. If a rebound fails to occur, a breakout is a next thing to expect. 

For such a move, 2600SAT and 2550SAT support levels may be exposed to selling pressure. 

If these levels fail to hold, XRP may roll back to September 2019 low of 2400SAT level. As of now, the technical RSI and MACD are moving sideways, suggesting an indecisive market. However, it’s essential to wait for a break or bounce before initiating an entry. 

The post Ripple Price Analysis: XRP Stagnates Above $0.23 As Bulls May Be Running Out Of Steam appeared first on CryptoPotato.

Source: Crypto Potato

New Regulations Set To Throw European Crypto Space into Turmoil

Politicians and regulators are growing increasingly aware of the significance of blockchain assets, and have begun scrambling to create rules intended to reign in the open market activity that is a hallmark of crypto use. In Europe, the Fifth Anti-Money Laundering Directive (AMLD5) has now taken effect, which directly addresses a range of cryptocurrency-related issues. This set of regulations has European crypto firms scrambling to sort out the compliance measures, and highlights the extreme difficulty lawmakers are having at trying to navigate and control the changes underway in the global economic space.

Passed under the guise of fighting criminal activity, AMLD5 creates the most comprehensive set of crypto regulations to-date in the Eurozone. At their core, they are designed to create transparency for all aspects of crypto use. For example, exchanges will be required to implement rigid know-your-customer (KYC) as will providers of custodial wallets. Suspected illegal activity is to be tracked, and various law enforcement agencies can investigate user activity at will. 

Not surprisingly, the reaction from the European crypto community has been harsh. Blockchain-related companies have balked at the expense of compliance. Deribit, a Dutch exchange, recently announced that it will relocate to Panama. U.K.-based Bottle Pay, a custodial wallet service, has shut down. More casualties of this regulatory implementation are certain to follow.

Aside from the costs involved, the rules being imposed are confusing, and fail to address the myriad of complex issues surrounding Blockchain platforms in a comprehensive manner. Notably, the supranational and quasi-anonymous architecture of the technology does not work well with laws designed to apply to defined geographic regions. If enforced as intended the AMLD5 could prevent many crypto-related companies from operating. Also, fines for non-compliance will be as high as 200,000 Euros per incident.

As concerning as the AMLD5 regulations are, they are only the first in a series of tough new crypto rules in the global pipeline. Simply put, the world’s major economies are now taking this new asset class seriously, and leaders do not like the economic paradigm shift now underway. Most of these rules have been created by lawmakers with little knowledge or experience with distributed ledgers, and are likely to be heavily influenced by the always powerful players from the legacy financial space. In other words, the market recovery underway is likely to be tempered by hostile action on the legal front. 

On the bright side, the changes underway are a natural and expected step in the move toward mainstream cryptocurrency adoption. Bad laws, although unfortunate, must be experienced for policymakers to learn and adapt. Nevertheless, for the time being, the European crypto community is bracing for what is certain to be a bumpy ride ahead.

Featured Image via BigStock.

Source: Crypto News