The third week of July saw the bulls retake control of the cryptocurrency market, at least momentarily. Arguably the biggest news this week was when U.S. Federal Reserve Chairman Jerome Powell made negative remarks about cryptocurrency during his July 18 testimony to Congress. Powell stated that he believes cryptocurrencies are not real money and have no intrinsic value. He also expressed concern that retail investors are taking big risks by investing in coins. He added that the lack of investor and consumer protections is troubling. As America’s top central banker, it is no surprise that Powell considers the cryptocurrency sector as pure speculation.
Here’s the rest of the week in review:
On Wednesday, the U.S. House of Representatives held hearings on cryptocurrencies. Representative Brad Sherman, a California Democrat, stated that cryptocurrency is teeming with criminal use and called for a scathing blanket ban on buying and mining cryptocurrency. Within hours, the cryptocurrency community fought back on social media. People publicized Sherman’s hypocrisy, as one of his largest campaign donors is a credit card company. They also criticized the U.S. government for wasteful spending. The #CryptoCongress hashtag quickly became trending.
BlackRock, the world’s largest asset manager with more than $6.3 trillion AUM, has reportedly set up a working group to explore the highly volatile cryptocurrency market. Insiders suggest the team will be investigating cryptocurrencies and their underlying blockchain technology, in addition to the current competitive landscape directly effecting BlackRock. Ultimately, the team aims to determine whether the firm should invest in bitcoin futures. BlackRock CEO Larry Fink is on record stating that he is a “big believer” in cryptocurrencies, but that the current market today is primarily focused on speculation and is not an ideal opportunity for institutional investors.
The Chinese government’s China Electronic Information Industry Development (CCID) department has released its third round of public blockchain index rankings. According to the index scoring, which is broken out by technology, application and innovation, South Korea-based EOS (EOS) grabbed the top spot yet again. EOS is well-known for its delegated proof-of-stake (DPoS) consensus model which works to speed up transactions and block creation at the expense of some level of decentralization.
India’s Supreme Court has set the date of September 11 for a final cryptocurrency petition hearing. The central bank’s ban on banking relationships with the cryptocurrency sector and cryptocurrency purchases through bank accounts went into effect in July. On Friday the Supreme Court ruled to uphold the central bank’s prohibition. Cryptocurrency advocates created a petition to the justices for a rehearing. They argue that the central bank’s directive will make India less competitive in global finance and technology.
San Francisco-based crypto giant Coinbase is walking back claims that it has received U.S. regulatory approval to list digital assets that are categorized as securities on its trading products. While Coinbase originally overstated its current status with regulators, it seems that the company is still very much on track to offer a more expansive number of services, including crypto securities, margin and over-the-counter (OTC) trading, in addition to new market data products.
CoinDesk reports that Chinese crypto millionaires are using their Bitcoin (BTC) to buy real estate abroad. A former beef salesman, Guo Hongcai sold 500 BTC and bought a luxury mansion with chive gardens near San Francisco. Faced with increasing capital controls from the Chinese government, Chinese investors are increasingly looking toward the U.S. and U.K. as places to park their wealth. London and California’s Bay Area are especially appealing. As Chinese citizens continue to ride the cryptocurrency trend, more capital will attempt to flow into foreign markets like real estate.
Cryptocurrency prices rebounded comfortably this week, with buyers squarely in control. The biggest losers were Bitcoin Private (BTCP) and PRIZM (PZM), both down 15%, and WaykiChain (WIC), down 12%. The biggest winners were Dogecoin (DOGE), up 48%, WhiteCoin (XWC), up 46%, and Stellar (XLM), up 42%. Although the majors easily blasted through two short-term exponential moving averages, they still need to challenge and overcome resistance at the 100-day and 200-day exponential moving averages and make convincing moves higher before any talk of a bull run is legitimate.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.