Since the beginning of 2019, there has been an influx of news that indicates a significant growth of the crypto market. Compared with the previous year, experts note the rapid pace of technological development, as well as the steadily growing dynamics of the market prices of cryptocurrencies. This is due to the massive inflow of capital of global financial corporations, which are not ready to further lose the opportunity to seize competitive advantage, given the surge in interest in the blockchain and cryptocurrencies in previous years. In addition to these events, DeCenter also paid attention to the latest news on the use of Bitcoin and its “colleagues” in everyday life.
The Controversial Situation with Bitcoin ETF
It is worth expecting that the issue of state regulation of transactions with Bitcoin that was relevant in 2018 will remain a stumbling block for many more months. But the past week brought some clarity on the situation with applications to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
First, we note the decision of the CFTC management, following another organization, the SEC, which has taken up a more detailed study of the blockchain and how to use it. In a press release published on the official website of the agency, a decree was issued on the beginning of closer monitoring and research of the crypto industry by the Division of Market Oversight (DMO). Experts see this as attempts of the state regulator to collect the most relevant conclusions regarding the application for the start of trading in Bitcoin futures on the Nasdaq exchange. The Bakkt platform can help them in this matter, which also hopes to receive approval from regulatory organizations to trade in Bitcoin futures contracts with physical delivery. By the way, this project has already attracted funding of more than $182 million from the Microsoft venture capital fund, as well as Starbucks and some other organizations. Moreover, by the end of this year, another $25 million could be attracted, as told by one of the directors of the ICE (which owns the New York Stock Exchange) Scott Hill during a speech to investors.
Continuing the topic of financial regulation and its interaction with the crypto market, it is necessary to note the interesting idea that the SEC considers tokens of functioning networks to be unrelated to securities. SEC Commissioner Hester Peirce, who received the tender nickname “crypto mother” in the community for her support of cryptocurrencies, unlike many of her colleagues in the field of traditional finance, has a similar opinion. Peirce has already officially confirmed the opinion of experts about the impossibility of applying the legislative base on securities in relation to utility tokens. This decision opens up new opportunities for the development of the crypto market without the threat of sanctions from the dominant American regulator, although creating investment contracts will require meeting all SEC requirements that are not yet fully defined due to the novelty of the cryptocurrency subject.
Also, last week, the American investment company Reality Shares, which specializes in managing client assets, decided to create an exchange-traded investment fund with access to Bitcoin futures on the NYSE Arca. A corresponding application was filed with the SEC, but the very next day, it was voluntarily withdrawn. The whole background of such a lightning decision lies in the call from the representatives of the regulator, which came to the lawyers of Reality Shares, who told about the impossibility of approving any applications at the moment in accordance with the current law on exchange funds adopted in 1940. It should be noted that if the application had not been rejected within 75 days, then it would have had all the chances of automatic approval.
Is Everything Ready for the Upcoming Constantinople Fork?
The latest news suggests that the Ethereum team is trying to remove the last obstacles before the Constantinople network update scheduled for the end of this month. Recently, programmers from the Ethereum Foundation described an error in smart contracts identified in the software update being developed (in addition to a double-spending error), which allowed replacing the rules of a self-destructing smart contract, which could lead to loss of funds. This can be done using the Create2 function. To protect against this, the developers are going to remove the danger of additional playback. Meanwhile, the process of debugging this update is in full swing and errors are still being identified. The network upgrade will occur approximately on block 7,280,000, which will be produced somewhere between February 26 and 28.
At the same time, there are ongoing activities aimed to prepare the community for the upcoming changes in the field of mining of Ether. On February 10, the issuance of this cryptocurrency dropped to 13,000 units, although a few months ago, this value was 20,000, and the time taken to extract one block rose to 20 seconds. It is this event that led to the rise in the price of many cryptocurrencies at the beginning of the past week, so the hopes of many investors regarding the appreciation of crypto assets are related to the launch of the Constantinople hard fork.
Travel by Public Transport for Bitcoins
Argentina can become one of the pioneers of the use of cryptocurrency not only in the financial world but also in everyday life. Now people can pay for public transport in many major cities using the SUBE contactless card, replenishing it in the offices of bus stations, ticket sales terminals, and kiosks of the national lottery. To do this, it was first necessary to agree on the state level with the Bitex crypto exchange. Now people can pay for the use of buses and subways in this South American country by first topping up accounts not only in fiat currency but also with the help of Bitcoins. In the near future, the function of paying utility bills using Bitcoin wallets will also be available.
J.P. Morgan Breaks into the Market with Its Cryptocurrency
Wall Street continues to take confident steps to familiarize itself with the world of cryptocurrencies. And if the acquisition of the Circle startup by the investment bank Goldman Sachs, which subsequently introduced its own USD Coin cryptocurrency, became one of the first successful examples, then today we can announce a bold decision by another, no smaller financial organization, J.P. Morgan, to launch its own JPM Coin. In the coming months, the bank’s team will conduct product testing for possible use in third-party credit organizations and corporations led by a financial conglomerate, which amount to $6 trillion. The main idea of the project is to increase the speed of payments made, which today is only provided by blockchain, and smart contracts must guarantee its reliability. The main competitors like SWIFT, an international payment system between banks, are hopelessly outdated, and assets held in J.P. Morgan accounts in the form of dollars, securities, and others need to have their ownership transferred more quickly when they are sold. The cryptocurrency will be provided in the ratio of 1:1 to U.S. dollars, which will be credited to the accounts of institutional clients of the bank, that is, ordinary investors will not be able to use the new cryptocurrency.
By the way, speaking of Wall Street and its interest in the world of cryptocurrencies, we can note the fact that Nasdaq, one of the world’s largest technology stock exchanges, will start providing information about the current rate of Bitcoin and Ether almost in real time starting from February 25. Users will be able to learn about the current situation on the spot market from the most liquid exchanges with a delay of 30 seconds from the Bitcoin Liquid Index (BLX) and Ethereum Liquid Index (ELX) indices.
The most important events of the crypto market in February 2019:
On February 11, the BitTorrent (BTT) Airdrop was held for TRON (TRX) holders, and the distribution will last until February 2025, which may lead to volatility for TRX.
Expiration of Bitcoin futures contracts on the CME on February 22.
For the period from February 26 to 28, an update of Constantinople on the Ethereum network is scheduled, which has already led to an increase in the rate of Ether and may also lead to volatility on a specified date before it.