Bitcoin continues its correction below $8,000…but some big names still think that the future is bright. People, such as the major Bitcoin investor Tom Draper and analyst Tom Lee, aren’t worried about the future of the world’s top cryptocurrency — instead, for them, this represents a buying opportunity.
Where’s all this optimism coming from? All these people are long-term HODLers, and they have an interest in giving Bitcoin a long lifespan. And they’re also core figures in the industry, with a first-hand look into its progress and development. To them, the future keeps getting brighter for Bitcoin.
Some specifics? Tom Draper thinks that the Lightning Network, a Bitcoin technology that circumvents the 3 transactions per second rule, is the next bull catalyst, while others have pointed to the continuing general growth of the industry.
What about technical signals? Bitcoin tends to move on catalysts, that is, news that stir up hype about Bitcoin or the blockchain in general. But there are signs that a diamond bottom pattern is starting to take shape, and that’s usually a pretty good indicator for a bullish breakout.
Wut We Think: It always helps to remember Bitcoin’s volatility and long-term development when considering the price since it brings a much-needed perspective. A crypto winter does seem likely, but as new technologies like the Lightning Network are adopted, and as adoption slowly marches on, it’s difficult to imagine that the price will continue downwards.
One of the world’s premier financial hubs is about to let crypto derivatives trade on domestic exchanges…giving the tool a much-needed jolt of legitimacy. Derivatives have been skyrocketing in popularity lately as volatility has fallen, and this move would further normalize the trading of derivatives in crypto.
Why are they doing this? According to a regulator, they’re doing this as a way to reduce risk when trading crypto derivatives and giving investors the same safeguards and protections as any other financial instrument.
Is there any demand? The Monetary Authority of Singapore, the regulatory body proposing this move, says that they’re considering this due to high demand from professional investors like hedge funds and asset managers.
Does this represent a broader trend? It may just be Singapore hopping on the bandwagon, but the city-state is known for being financially innovative. But ever since the CME and later, Bakkt futures were approved, it seems like crypto derivatives are starting to gain a wider audience.
Wut We Think: Singapore is just the latest in a line of governments who are coming around to crypto — or at least the professional investment version of crypto, which means greater regulation and oversight. Ultimately, greater oversight can protect traders, but as crypto volatility slows, traders will need to shift to derivatives if they want to keep seeing the same level of returns.
Regulation is a hotly-contested topic in the crypto world — old diehards, springing from the cypherpunk and libertarian movements, saw crypto as a way to circumvent or disconnect from government-controlled monetary systems. But for crypto to see real adoption, it is increasingly clear that people expect and need some standard protections and safeguards.
Regulation: Regulation refers to a set of rules or practices that aim to modify the behavior of an industry. In financial terms, regulation usually refers to the rules and laws set down by legislative and regulatory bodies that apply to financial actions. These rules typically seek to offer investor protection from fraud and ensure that market participants are given an equal playing field. Some common regulations concerning crypto are anti-money laundering and know-your-customer laws that exchanges in certain jurisdictions are obliged to comply with.