Recent Developments in Crypto Currency Are Giving Investors a Pause
Scroll DownRecent news that the US Commodity Futures Trading Commission is embarking on a probe of the world's largest cryptocurrency exchanges has sent the market into a tailspin. This comes after many cryptocurrencies had begun to show recovery following a weak showing in Q1 of 2018. Overall market capitalization of cryptocurrencies dropped by $20 billion in the wake of the news that the CFTC is looking into the operations of Kraken, Bitstamp, Coinbase, and itBit. These exchanges constitute a block of companies that process high trading volume. All of them are among the top 50 crypto exchanges, with Kraken and Coinbase being ranked in the top 20. The CFTC has requested data from these four exchanges on cryptocurrency trades. The news comes as cryptocurrency investors continue to face mounting pressures from the US government to submit to regulatory measures. Specifically, the CFTC is concerned that price manipulation may be occurring on some crypto exchanges. The investigation began in late 2017 as Bitcoin underwent massive growth before tumbling dramatically in early 2018. Some 100 crytpocurrencies were affected by the news. Among the biggest losers were IOTA and EOS, two popular altcoins that are among the top ten digital assets by trading volume. IOTA was down 10% while EOS tumbled 8% during the 24-hour period following the release of the news. Some, however, believe that other factors have contributed to the negative turn. Reports from South Korea revealed that one of its exchanges, Coinrail, may have been the victim of an attempted hack. Security breaches continue to be a concern for all cryptocurrency exchanges, and hacks have the ability to cause a downshift in crypto trading. The biggest concern, however, remains that the probe by the CFTC could open the door to regulation of crypto trading. Much attention has been focused on the markets since the Bitcoin boom last year, with some prominent financial analysts crying foul.
Comments