Bitcoin Hits 2.0 Trend with Two Reasons
It does appear that powerful forces are smiling down on cryptocurrencies, as Bitcoin surged to an all-time high in 2018 to close at $7820 on Monday. Aligning in the most cohesive way for cryptocurrencies are two key developments in the week past.
Firstly, an announcement of interest by the largest ETF provider in the US, Blackrock’s likely entry into virtual currency funds. Secondly, the endorsement cryptocurrencies received by the most powerful economic bloc currently, the G-20 countries, in Argentina have also propped up the prices of these digital currencies.
Two reasons for One Trend
ETF is a major investment instrument in the US, and one of the biggest providers of well-packaged and diversified ETFs is BlackRock. Its CEO, Larry Fink’s sphere of influence has been so wide that companies in the past have reconsidered their Corporate Social Responsibilities and implemented sustainable practices, so as to get the large fund provider to invest in them. And last year when Fink declared that cryptocurrencies were mere ‘money laundering’ instruments the common investor chose to keep away from virtual coin investments.
However, it appears that many of the hedge-fund managers and ETF providers are now reviewing their earlier resistance to virtual coins, as mature processes for their transactions and use case commence. Last week, BlackRock and a host of other high-profile asset management owners declared that they are interested in making initial forays into digital assets and currencies in the immediate future.
The other important factor which has led to the resounding rally in prices has been the backing-off many large economies from over-regulating the fledgling digital currencies sphere.
The weekend saw the Finance ministers of G-20 block meet in Argentina and conclude that cryptocurrencies do not ‘pose a global financial stability risk.’ However, the group did recommend that governments will have to remain cautious and vigilant.
Besides, the members of this group have been exploring new standards of regulations which will bring about harmonization of cryptocurrency use across the world.
It has directed the Task Force for Financial Action (FATF) which focuses on removal of money laundering as well as terrorist financing to offer by October 2018 a framework of standards to manage crypto-assets.
Positive sentiment helps
The positive sentiment by the world financial systems has eased the pressure on cryptocurrency trading. Thus far there has been a tremendous negation of the ease of use of these virtual currencies for their misuse in anonymous funding of terrorist activities and money laundering. In fact, China had one of its largest anti-crypto currency crackdowns by regulators when a Football World Cup online betting ring was busted. South Korea regulators too acted strongly against the repeated thefts it’s crypto exchanges and vaults experienced in previous weeks.
With regulatory blankets nearly-off digital currencies, the alternate coins are expected to receive a boost in terms of establishing advanced processing systems which will allow integration or symbiotic use of digital currencies or blockchain technology in nearest future, by governments across the world. However, the twin reasons have been sufficient in the past few weeks to propel Bitcoin towards a revival or a Bitcoin 2.0 trend.