Source: BTC Manager, originally published on .
In June, Todd Colvin, an analyst at Ambrosino Brothers, mentioned to CNBC’s “Futures Now” that it’s very difficult to be optimistic about the cryptocurrency market in the short term. Uncertainty regarding security and regulations, alongside a lack of accessibility to digital currencies, has resulted in the current bearish crypto market, in Colvin’s opinion. However, Colvin believes that adjustments and additions to the cryptosphere could turn things around.
Questionable Security Creates Volatility in the Crypto Market
In terms of security, Colvin believes that hacks, heists, and security breaches are “the things that cause these bear markets when you have these, ‘Oops, somebody robbed my wallet off an exchange.’ That caused the last big $1,000 decline we had.”
The analyst makes a valid point considering in June 2018 alone, two South Korean cryptocurrency exchanges Bithumb and Coinrail lost over $30 and $40 million, respectively. The hacks may have contributed to a loss in confidence in the cryptocurrency market, pushing Bitcoin’s price to hit below $6,000 in late June.
Just recently on July 9, 2018, Israeli cryptocurrency platform Bancor experienced a security breach theft and lost $12.5 million in Ethereum tokens and $1 million in Pundi X tokens. According to CNBC, Bancor mentioned that a cryptocurrency wallet on its network was compromised, however, “no user wallets have been compromised in the attack.” As a result of the attack, according to CoinMarketCap, Ethereum dropped 7.7 percent, and Pundi X fell 15 percent in value.
The fact remains that while many cryptocurrency exchanges and platforms recognize the importance of implementing strong security measures, security breaches and heists are a very common problem. Improved security would undoubtedly garner increased trust in the cryptosphere.
Regulation a Large Issue for the Cryptocurrency Industry
The lack of clarity in terms of regulations is also a large obstacle for the cryptocurrency industry. “Right now the government doesn’t really know how to define or quantify what Bitcoin is,” said Colvin. “They don’t call it a security, so it doesn’t fall under the SEC umbrella. It’s still very confusing.” Clarity on regulations could entice a more risk-averse crowd.
Bloomberg reported in March 2018 that the cryptocurrency industry is currently operating in a very gray legal area. With the lack of a global standard and coordination among authorities, legislation and regulations for cryptocurrency exchanges and ICOs vary significantly from country to country. Such variance may result in confusion or trepidation for potential crypto users.
Lack of Accessibility Remains a Big Problem
Unfortunately, security breaches and unclear regulations are not the only problem. While there is a lot of demand for cryptocurrencies, Colvin believes that “nobody can get their hands on it. More accessibility will bring higher Bitcoin prices over the long term.” Accessibility to Bitcoin has been slowly and steadily improving as digital currencies gain popularity and demand increases, indicating some hope in terms of seeing a market turnaround.
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