Bitcoin almost reached its all-time high. The rates of other cryptocurrencies have risen. The Chinese bank abandoned the idea of selling bonds worth 3 billion dollars for bitcoins. The South Korean Congress proposed to postpone the introduction of the income tax on cryptocurrencies. And the head of the SEC, Jay Clayton, called Bitcoin a “stored value.” Join us as we analyze all these events in today’s digest of the main news from the crypto world of the week.
Bitcoin almost reached its all-time high
On November 24, the value of bitcoin almost approached its all-time high, reaching a price of 19 157 dollars. Analysts attribute such an increase in the value of bitcoin to an increase in institutional investments, due to the economic and geopolitical uncertainty caused by the coronavirus pandemic.
Also, the optimistic economic environment has turned stocks and bitcoin assets into investment assets. “Bitcoin has now moved into risky trading along with the equity markets,” said Jason Lau, COO of OKCoin, a San Francisco-based cryptocurrency exchange.
Fun fact:A recently leaked report from a senior Citibank analyst described bitcoin as “21st-century gold” and suggested that current market trends could push it towards 300 000 dollars next year. However, some analysts warn that the market could fall after Bitcoin reaches its all-time high of 20 000 dollars.
Why did the head of the SEC call bitcoin a stored value?
According to Jay Clayton, the US Securities and Exchange Commission (SEC) wants to facilitate the use of tokenized exchange-traded funds (ETFs).
He explained how the US government regulates cryptocurrency. In an interview, Jay Clayton called bitcoin a “stored value” and noted that “its growth is due to the inefficiency of the current payment system.”
Clayton said: “We have determined that bitcoin is much more a payment mechanism and stored value than a security.”
Rates of other cryptocurrencies went up
Ether (ETH), the second-largest cryptocurrency by market cap, increased on Tuesday, trading at around 604 dollars. It went up by 1.6% in 24 hours as of 21:00 UTC (16:00 ET).
The digital currency markets have seen tremendous gains over the week, and one crypto asset, XRP, has jumped significantly in value over the past seven days. Thus, its price has grown by 123% in 30 days, and the Spark token distribution has also increased its value.
Chinese bank cancels the sale of 3 billion dollars in bonds that could have been purchased with bitcoins
The China Construction Bank, one of China’s Big Four banks, began selling 3 billion dollars in bonds in early November 2020. The bonds were to be listed on a regulated Malaysian digital asset exchange and could have been purchase with bitcoins.
However, on November 23, 2020, the China Construction Bank withdrew bonds after the bank’s role in the deal appeared under scrutiny by the Chinese government.
South Korean Congress proposed to postpone the introduction of the income tax on cryptocurrencies
The Planning and Finance Committee of the DONG-A ILBO National Assembly plans to introduce a cryptocurrency income tax starting from January 1, 2022, at the earliest.
Also, in March 2021, the Law on Special Financial Information (Law on Reporting and Use of Specific Information on Financial Transactions) will enter into force. By September of that year, exchanges will be required to comply with Know Your Customer (KYC) requirements. This means that they will have to verify the identity of their customers. KYC rules make it difficult for criminals to hide the origin of illicit funds.
As for domestic business, Huobi, a major Chinese cryptocurrency exchange, is considering acquiring bitFlyer and South Korea’s leading exchange Bithumb.
Summary
Analysts and experts have different opinions on the events of the last week.
Some of Wall Street’s biggest names support cryptocurrency’s explosive growth. Rick Reader, a chief investment officer at BlackRock, said on Friday that Bitcoin is “here to stay” due to millennials’ interest in digital payments.
Others are skeptical of such rapid growth. Ray Dalio said last week that there is “something missing in bitcoin,” adding that “its volatility reduces its use as a store-hold of wealth and a medium of exchange.”
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Each market player can choose the best ways to use the cryptocurrency to support their goals. Businesses can accept payments from customers, quickly exchange currencies and make other transactions, while individual clients can make money on rates, as well as keep their funds in a reliable wallet and make quick currency exchanges with ease and comfort.
