Bitcoin BTC price swings wildly before settling above $29K
Here’s what happens:
Prices: Bitcoin, Ether and other major cryptos fluctuated wildly over a 24-hour period.
Insight: Crypto and its regulators are struggling to find linguistic consensus, observes CoinDesk columnist Daniel Kuhn.
Bitcoin Rally Above $29K
Within 24 hours bitcoin went from good to bad to somewhere in the middle.
The largest cryptocurrency by market capitalization recently traded above $29,000, up more than 2.4% from the previous day, but well off Wednesday morning’s peak of $30,000. BTC fell as low as $27,264 at a time when investors were considering around $310 million in losses from liquidations – both long and short positions – over a one-day period.
In an email to CoinDesk, Markus Levin, co-founder of the blockchain-based geospatial oracle network XYO Network, also noted the possible impact of separate rumors that the US government wasted a large amount of bitcoin, and that coins from long-disgraced crypto exchange Mt. Gox would be sold on the market. But Levin optimistically added that the market rebounded quickly – evidence of bitcoin’s months-long resilience.
“It appears that this was primarily just hearsay, but what is interesting to see from all of this is how much of the selling triggered by this event was ultimately absorbed by the market,” he wrote. “The market is pretty jittery right now, yes, but Bitcoin is looking stronger and stronger from the lows of late last year.”
Ether was recently trading at around $1,910, up 2.4% in the last 24 hours and not far from where it started on Wednesday. The second largest crypto by market cap fell below $1,800 at one point on Wednesday. Other major cryptos were also seen, but were recently in the green. The CoinDesk Market Index, a measure of the performance of the crypto markets, was recently up around 1.9%.
Asian markets were mixed on Thursday morning with the Hang Seng and Nikkei up slightly. US markets fared similarly with the Nasdaq closing up 0.4%, while the S&P 500 fell 0.3%.
Can the crypto industry find consensus with its overseers?
One of the problems that happens when an industry grows is that it becomes difficult to tell if everyone speaks the same language. Nowhere is this more evident than in the conversations between developers of decentralized finance (DeFi) and financial regulators. Can you find linguistic consensus on Consensus? That seems unlikely.
For the most part, financial watchdogs in the US (and the international bodies that are essentially offshoots of the US Treasury Department) have said that crypto clearly fits within the existing regulatory framework. Crypto’s governing rules are supposedly already written.
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And then you have situations like US Securities and Exchange Commission Chairman Gary Gensler asking crypto operators to “come in and register” with the agency and FinCEN advocating for stricter KYC/AML requirements across crypto.
Crypto, with exceptions, has largely promoted itself as a square peg that can’t fit into the round hole of the so-called Howey test (the guide the SEC uses to determine if something is a security, which essentially examines whether “public that investing is anticipating profits based on the efforts of others”).
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