We have prepared an overview of what has happened so far in the world of cryptocurrencies in 2018 – a Simple summary. Whether you took some time off following the news and you’d like to catch up, or you just want to go over this year’s highlights, this article is for you.
According to an old rule, what goes up, must come down. This also happened to cryptocurrencies in January. We experienced significant price drops as well as high volatility in terms of market capitalization. The explanations provided ranged from reactions to regulatory efforts to crowd psychology behaviors. And although this might be difficult to watch when you have bought the assets and you are calculating how much the price change means in e.g. US dollars, this seems to be an innate feature of cryptocurrencies. Higher returns come at a cost of higher volatility. Also, even if the prices go down, seasoned traders know they can also short e.g. a BTC-USD pair and still make a profit.
Cryptocurrencies have been garnering notable attention in recent months from governments, regulatory bodies as well as media outlets. This was also reflected in the World Economic Forum in Davos, Switzerland. Many participants of the event praised the technology behind cryptocurrencies, specifically blockchain. One of them was a Nobel-prize winner Robert Shiller. Other voices focused on the malicious uses, such as money laundering or financing terrorism, and the need to prevent them. This view was shared by Steven Mnuchin, US Secretary of the Treasury and Christine Lagarde, the managing director of the IMF. Also, business representatives participated in the discussion: Lloyd Blankfein, Goldman Sachs CEO took the opportunity to deny the autumn report by Wall Street Journal which claimed that the bank had set up a bitcoin trading desk.
The beginning of February brought us a Senate Committee hearing with J. Christopher Giancarlo, heading the US Commodity Futures Trading Commission and Jay Clayton, his counterpart at Securities and Exchange Commission. The general message was optimistic to the cryptocurrencies community. Although both chairmen expressed the need for further regulations of the sector, they also emphasized the advantages of the technology, with Giancarlo stating that there is a need for a ‘do no harm’ approach when designing policies.
Japanese cryptocurrency exchange Coincheck declared that it had been hacked. The value of the tokens was estimated to exceed $500 million, which is more than the infamous Mt. Gox hack. Fortunately for its customers, and for the cryptocurrencies community, Coincheck declared it would repay the users whose tokens were stolen.
It will be interesting to see what developments the following weeks will bring, especially in terms of cryptocurrency prices as well as regulatory actions on the part of governments.
Note: A representative of SimpleFX is the author of this article.