On 17 July Bitcoin broke past the $7000 mark. The influx of good news behind this momentum helped it to go over $8000 after a few days. Let us look at some events that most likely contributed to this trend.
CRYPTO BOOSTING EVENTS
Adding a further boost to the crypto market was BlackRock’s CEO proclaiming the company a student of crypto. Although the CEO tried to soften the statement by claiming he does not see much investor demand for crypto, the market interpreted the fact that the company had assembled a task group to study blockchain as more than just mild interest.
Cryptocurrencies are also finding their way to the domain of established institutions such as the Chartered Financial Analyst (CFA) Institute which will be adding cryptocurrencies to its 2019 exam. The topic will be included in a new module called Fintech in Financial Management. Bloomberg proclaimed this event a “definitive sign that cryptocurrencies have arrived on Wall Street.” The London School of Economics and Political Science also announced an online course on blockchain technologies naming volatility as the cause of global interest in the topic.
SEC STILL PERCEIVES CRYPTOCURRENCIES AS TOO RISKY TO GO FULLY MAINSTREAM
Is the long crypto winter that lasted from the beginning of the year truly over? Could it be that blockchain is perceived as an island of optimism surrounded by an uncertain economic environment or could we expect the blockchain to join the rank of traditional asset classes even if the global situation was substantially safer?
Despite the generally auspicious climate for crypto, the SEC refused the second attempt of the Winklevoss twins to launch the first crypto ETF on a regulated exchange. The main argument behind the rejection was security issues. Bitcoin dropped but still remained way above the June low point of $5750. Still, hopes for the acceptance of Bitcoin remain high for the next SEC announcements expected in August.
US Congressman Brad Sherman has created a stir recently as he called for a ban on cryptocurrencies in the US, but the possible reason was quickly pointed out by the media. One of his major campaign contributors was a credit card processing company, a business that may legitimately feel threatened by the rise of blockchain. The recent outage of the Visa system in Europe was a reminder that payment systems should not be averse to some decentralization.
FINTECH ADOPTION IMPLIES THE POINT OF NO RETURN
Speaking of the rise of blockchain, I believe it is safe to say that blockchain technology is now beyond banning. Any country doing so, would find itself in a detrimental position in regard to global fintech development. A technology in its infancy has security issues, some of which will be done away with, others lessened, by increased awareness. When email became widely adopted there were a lot of scam letters going around, but nobody advocated we should abandon this means of communication. That being said, we are yet to witness a process that will standardize the use of blockchain technology globally and put it on a par with traditional finance. The wait may not be short but the interest kindled so far cannot be extinguished.