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The cryptocurrency market sank this week in an almost ritualistic weekly occurrence. BTC fell below $6,000, Ethereum dipped under $300, and the combined market capitalization of all digital tokens dropped from above $200 billion to just above $175 billion. The bit-indexai.com staff is enthusiastic about cryptos. Explore the official portal for further information. But while some might interpret these developments as a pre-collapse indicator, others see it as another sign that we are still in the early stages of this new technology and asset class. Here are five noteworthy happenings in the world of cryptocurrency that surfaced over the past few days.
Tether is no longer trusted by many.
Tether, the supposed issuer of a dollar-backed Stablecoins, has come under increasing scrutiny in recent weeks, especially in the context of the current crypto market crash. While tether (USDT) was mostly ignored when the market was on an upward trajectory, many are now scrutinizing it as a possible source of market instability. Tether’s USDT is often used as a substitute for the dollar by crypto exchanges, particularly those in Asia, where the regulatory environment has been hostile to business. The fact that USDT is not institutionally traded (i.e., there are no brokers that deal in USDT) has made many in the crypto community uncomfortable. Skepticism about the integrity of USDT’s dollar reserves (or lack thereof) has been growing for some time. Still, it reached a new level earlier this month when some research initiatives published reports claiming that USDT’s cash does not exist.
Ethereum Co-Founder: Don’t Believe Everything You Read
The Ethereum co-founder, Vitalik Buterin, has defended the reputation of his blockchain and smart contracts technology against recent criticism. In a blog post on Medium, Buterin admonished reporters who wrote articles that “hyperventilate[d] about the coming collapse.” Buterin has made it clear that the recent correction in the cryptocurrency market is a natural correction after the exponential growth of 2017. He cites two common fallacies that are currently plaguing the cryptocurrency industry. First is the “novelty bias,” the tendency to overestimate the critical or significant new development. The other is the “discounting principle,” which is the tendency to underestimate the significance of already known things. Buterin says we need to appreciate that blockchain and innovative contracts technology is still in their infancy.
Ripple winning over big banks
Ripple’s XRP token has been seeing a lot of interest from big banks and financial institutions, who are using the token to speed up their payment and settlement processes. A report published on Business Insider said, “Ripple is winning the race to become the standard for cryptocurrency payments.” Now, as Ripple’s token XRP continues to rise in value, many are beginning to question whether it is a security, given that it functions very similarly to common stocks. But the company is quick to correct the narrative, saying that XRP is not a security but rather a “token used to build out and deploy the network.” Still, this is the same thing any company would say about its securities.
BTC cash is having a moment.
The fourth-largest cryptocurrency by market cap, BTC Cash, has been receiving much attention lately, particularly in light of the BCH mining policy controversy and the rapid growth in mining difficulty. But more importantly, BCH has been outperforming virtually every other top 10 cryptocurrency since the start of the year. The recent rise of BCH is attributed mainly to the news that Coinbase, the leading US cryptocurrency exchange, is exploring adding new assets to its platform. The announcement, made on November 29, has led many to believe that BCH is one of the assets that Coinbase is considering.
And finally, pay attention to Cash and Neo.
Cash, the privacy-focused cryptocurrency, has been growing in popularity as a way to transact anonymously over the internet. And as we enter a future where privacy is increasingly threatened, Zcash could play a significant role in preserving data and communications privacy. Zcash is also positioned well to take advantage of the growing number of blockchain applications in the financial sector. And Neo, which is often referred to as China’s Ethereum, has seen an impressive increase in its price and trading volume lately. Neo is often seen as a competitor to Ethereum since they both run on innovative contract platforms.
Let’s be honest: the cryptocurrency market is unpredictable. This week’s sharp decline in the total market cap is likely to be followed by an even greater climb in the future.