Yingwei Financial Investing.com- Last week, we heard the speeches of several celebrities at the B-Word, an online cryptocurrency summit. In this meeting, ARK Invest founder Cathy Wood, Twitter and Square co-founder Jack Dorsey, and Tesla founder Elon Musk all made speeches.
Among them, “Mu Mu Jie” expressed her optimistic expectations for the cryptocurrency market led by Bitcoin. Although Musk admitted that there are some problems with cryptocurrencies, he denied that he abandoned them. At the same time, Dorsey also admitted that cryptocurrency is the currency of the Internet. Among them, Musk and Dorsey have always been typical representatives of disruptive technological forces.
However, at present, governments around the world still tend to control the money supply, and the ability to control the expansion and contraction of the money supply is crucial to both monetary and fiscal policies. The cryptocurrency, which represents the power of liberalism, poses a direct threat to this. In the future, cryptocurrencies, stablecoins, and upcoming government-issued digital currencies will collectively constitute the digital currency market.
In terms of regulation, after the parabolic rise in April and May, the leaders of the two cryptocurrency industries, Bitcoin and Ethereum, are at a near low point. Some governments may intervene at this time to prevent the market from recurring. There is a skyrocketing situation.
Bitcoin and Ethereum have led the decline in the cryptocurrency market since April and May
On April 14, the day Coinbase Global Inc (NASDAQ:) was listed on NASDAQ, the market value of Bitcoin () reached a record high.
The above chart shows that the price of Bitcoin dropped from $65,520 on April 14 to a low of $28,800. Although it rose to 32,480 US dollars last weekend, it was even as high as 38,000 US dollars, but it is still at a historical low point, only half of the high price.
At the same time, prices peaked in May. When Ethereum rose to a high of $4406.5 on May 12, it fell to a low of $1697.75 at the end of June. Although it rose to the level of US$2040 on July 23, or even as high as US$2333, it was only half of the highest price.
It seems that the parabolic rise of these two cryptocurrency varieties is over. After the sharp drop, both Ethereum and Bitcoin are digesting this correction and consolidating not far from the recent lows.
Stablecoins are also cryptocurrencies, but there is a difference between the two
Bitcoin and Ethereum reflect the liberal philosophy and reject the government’s control of the money supply. The stable currency is a currency based on blockchain technology, and its price reflects the level of another cryptocurrency, legal currency, or exchange-traded commodity.
At present, the most popular stablecoins on the Internet are mainly,, and.
Among them, as of last weekend, the transaction price of Tether was 0.9994 US dollars, which is the third largest cryptocurrency after Ethereum, with a market value of more than 61.76 billion US dollars.
During the same period, the price of USDC was reported at US$0.9989, making it the seventh-ranked cryptocurrency, with a total market value of US$27.025 billion.
In addition, the price of BUSD is reported at US$0.9989, which is the tenth-ranked cryptocurrency, with a total market value of US$11.85 billion.
Finally, as of last week, the token price of DAI was US$1 and the market value was US$5.42 billion, ranking 22nd among more than 11,000 cryptocurrency varieties.
Yellen and regulators are paying close attention to stablecoins
U.S. Treasury Secretary Yellen has been working with regulators to closely observe stablecoins. Her secretary previously stated, “In view of the rapid growth of digital assets, the supervision and opinions of various institutions in this field are very important.”
Yellen affirmed the benefits of stablecoins, but also warned that although institutions need a framework to “mitigate the risks they may bring to users, markets, or financial systems.” As of last weekend, the total market value of cryptocurrencies was 1.395 trillion. The US dollar does not pose any systemic risk to the financial system. On July 23, the market value of Apple alone exceeded 2.479 trillion. Previously, when the cryptocurrency market rose to a high point, its market value rose to $2.4 trillion.
Regulators believe that the best time to establish a regulatory framework is before the cryptocurrency continues to expand to the level of a giant. Senator Elizabeth Warren sent a letter to the SEC requesting Chairman Gary Gensler to address the risks that the cryptocurrency market poses to consumers and financial markets. The chairman had previous experience in the financial technology field. Before the emergence of Bitcoin futures, he served as the chairman of the CFTC, and he also served as a professor of financial technology courses at MIT.
European and American regulation of the cryptocurrency market is coming
Fed Chairman Powell previously told the market that the central bank is evaluating the possibility of issuing digital dollars. In a press conference after the FOMC meeting in June, he stated that the central bank needs to “be prepared” on the issue of digital dollars. Last week, Powell also stated that one of the most favorable arguments in favor of the central bank’s digital currency is that it will reduce the market’s demand for multiple stablecoins or cryptocurrencies.
Obviously, the United States and Europe are about to introduce regulatory measures. In view of the fact that the Biden administration values more global cooperation, it is not impossible to unite countries to introduce a coordinated regulatory framework.
The core concern of governments is still to control the supply of currency. Ideological differences have created a huge philosophical gap. It is expected that the market will be divided by two levels of supervision-government-issued digital currencies and some stable currencies will have different risk weights and regulatory rules, while cryptocurrencies reflect further The value of the basic product.
Although we have heard a lot of malicious ransomware and software attacks using cryptocurrency payments, the real problem is that this asset class deprives the core money supply of control, which is a greater systemic risk.
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(Translation: Li Shanwen)