Crypto Hearing - a.k.a. how the US will deepen the market crash
The current market environment is definitely is reminiscent of that in the weeks following the Chinese stranglehold ban on cryptocurrency exchanges and ICOs in September, 2017. Again, we have massive uncertainty as to the future of the market despite the fact that now there are now two solid players – Japan and South Korea – who have started the tedious process of mainstream adoption.
Anyway, the current sea of red can be blamed primarily on one special event – foreboding hearing on the role of the two major US government agencies with respect to the cryptocurrency market.
SEC / CFTC Senate Crypto Hearing
The hearing, which has been all over the media recently, is scheduled on the 6th of February at 10 AM EST. In essence, it is a hearing where the chiefs of the Securities and Exchange Commission (SEC and the Commodity Futures Trading Commissions (CFTC) will appear as witnesses on the topic “Virtual Currencies: Oversight Role of the SEC and CFTC”.
Repercussion: Given the outstanding number of FUD articles based on real crypto misuse cases in the US (most prominently – BitConnect) as well as increasing adoption, the two agencies are now bound to provide legal / regulatory measures to curb fraudulent behavior.
It is my view that there will definitely at least be KYC / AML rules imposed (due to the media spam of “crypto laundering”); moreover, it is quite possible to have an outright ICO ban – as is the situation in South Korea. The aforesaid, however, do seem to constitute the best-case scenario…
It is also possible to have a severe regulatory pushback where there is severe pressure on exchanges, new user adoption requirements, tax hikes for investors, etc. In my opinion, a ban on exchanges is not very feasible but given the populist nature of the US government, it is not improbable…
Whatever the outcome, there is one thing which is beyond certain: any ruling on regulation (even those which are logical and in the best interest of the investors and consumers) will be spread as “cryptocurrency has come to an end” / “the world bans bitcoins”. Thus, expect a further dip when the media start spreading unfounded / researched news (a.k.a. FUD).