Major cryptocurrencies ended the week higher after encouraging news from one of the world’s largest crypto exchanges and from Fidelity Investments.
Bolstering the market, observers said, were comments from Binance founder and CEO Zhao Changpeng during a fireside chat at CoinDesk’s Consensus Singapore event that the company plans to establish crypto exchanges on every continent. By this time next year, Zhao said, he wants Binance to launch five to 10 fiat-to-crypto exchanges. The ideal would be two per continent, he said.
“That was very positive,” Nithin Eapen, chief investment officer at Arcadia Crypto Ventures in New York, tells ThirtyK, as such a sign of expansion and growth in cryptocurrencies “helps sentiment in the market.”
The market was also buoyed by word from Fidelity Investments CEO Abigail Johnson that the firm has cryptocurrency-related projects underway that could be unveiled by the end of the year. “More industry players coming in is a positive sign, and could lead to some much-needed regulation to help stabilize the market,” Timothy Tam, co-founder and CEO of CoinFi, tells ThirtyK.
Shortly after 4 p.m. EDT Friday, bitcoin (BTC) was trading at $6,763.68, according to ThirtyK data provided by CoinMarketCap, up 3.6 percent from the previous week. The cryptocurrency moved closer to the $7,000 mark it had climbed above earlier this month. Bitcoin reached a year-high of more than $17,000 in January. Ether (ETH) was up 14.3 percent for the week to $248.03. Ripple’s XRP token (XRP) surged 68.5 percent over the week to finish at 57 cents, while litecoin (LTC) gained 6.9 percent to $61.57.
“Ethereum is already light years ahead of Bitcoin in everything but price – and this gap will become increasingly apparent as more and more investors jump into crypto,” says Ian McLeod.
Ether to Dominate?
Ian McLeod, an analyst for Thomas Crown Art, an art agency that uses the Ethereum blockchain to guard against illicit activity in the industry, predicts ether will rebound from its recent slide and rally. Bitcoin will lose 50 percent of its market share to ethereum in five years, he says in a press release, because of what he calls ether’s expanded uses and superior blockchain technology.
“While there will continue to be peaks and troughs in the wider cryptocurrency market, due to its inherent strong core values, [ether] will steadily increase in value in the next few years and beyond,” McLeod says. “Ethereum is already light years ahead of Bitcoin in everything but price – and this gap will become increasingly apparent as more and more investors jump into crypto.”
U.K. Treasury Committee Weighs In
Meanwhile, the U.K.’s Treasury Committee released a report Wednesday calling for the government to address cryptocurrency market issues including hacking, volatility and anonymity that can lead to crime.
“As the Government and regulators decide whether the current Wild West situation is allowed to continue, or whether they are going to introduce regulation, consumers remain unprotected,” the report said.
The paper claimed that the British government currently has an ambiguous stance to the industry, opening the door to criminal activity as well as risks for consumers. On the bright side, the report said that better regulation could reduce volatility and possibly pave the way for the U.K. to become a global center for crypto trading.
Nigel Green, founder and CEO of deVere Group, writes in a press release that the report shows cryptocurrencies have become part of mainstream finance, and the sector is likely to rally as a result as investors feel more protected and confident to invest. “Cryptocurrencies are here to stay,” Green says. “In fact, in today’s increasingly digitalized, globalized world, demand for these digital, global currencies is only set to soar in the coming years.” Regulation of the crypto sector is now inevitable, he adds.
The Treasury Committee paper follows a report released this summer by the Financial Stability Board, the international watchdog chaired by Bank of England Governor, Mark Carney, that concluded bitcoin and cryptocurrencies do not pose a risk to the global financial system.
More Hacker Attacks
The market slipped, but then recovered, after news of another major cryptocurrency exchange hack in Japan. Digital currency worth around 6.7 billion yen, or $60 million, was stolen from Zaif, which is owned by Osaka-based Tech Bureau Corp. Bitcoin, monacoin (MONA), and bitcoin cash (BCH) were stolen, Tech Bureau disclosed Thursday.
The attack follows Coincheck’s loss of some $520 million in NEM (XEM) tokens in January. Thursday, The Asahi Shimbun reported that the National Police Agency (NPA) released data for the first six months of 2018 showing cyberattacks on crypto wallets and platforms tripled from the same period last year.
Hackers stole 60.503 billion yen (around $540 million) worth of cryptocurrency through 158 cyberbreaches in the first six months of 2018 versus $5.9 million from 149 cases in 2017. The majority of the losses in the first half of the year were from exchange platforms, around $518 million, with the remainder taken from individuals’ crypto wallets.
Eapen, for one, anticipates a rocky road ahead for the market, especially as investors digest another delay from the Securities and Exchange Commission over its expected decision on a closely watched exchange-traded fund proposal by New York-based VanEck and blockchain platform SolidX. An ETF would make it easier for investors to buy into the market. “The volatility will continue,” Eapen says.