Guest post by Oleg Vaisman
Cryptocurrency – new regulations, new dips
Bitcoin is now traded below $10,000 – a psychologically important marker for the cryptocurrency. It has even reached as low as $8,600 this week. And, it’s not only Bitcoin, all cryptocurrencies have fallen into a dip over the weekend, and they’re still in it. Ethereum, for instance, dipped below $700. The reason? A series of unfavourable events.
One such major event was the reported rumour about the Hack of the Binance exchange. Together with the news Bitcoin lost around 10% of its value, this accounts for part of the reason for the dip, even though the issue was quickly solved.
Another reason – advertisement bans. Earlier a huge player – Facebook – restricted advertisements of ICO (initial coin offerings) on its platform. Now Google is seemingly moving in that direction as well (although there is no official policy provided), which concerns and worries the crypto industry.
The negative movement of cryptocurrencies can also be caused by the US authorities, who are currently in the process of tightening control over cryptocurrency exchanges. Now according to the Security and Exchange Commission, if an online platform trades digital assets that are considered as securities (which includes major ICO issued tokens), it has to to register with the agency.
Japan suggests to discuss cryptocurrency at the next G20 meeting. The reason is to prevent money laundering issues. The general attitude of the G20 members is that regulations that are too strict would not be favourable.
The Switzerland-based Bank for International Settlements mentioned that cryptocurrencies and the technology behind them can make transactions and other settlements with securities more convenient. However it also reported that cryptocurrencies remain risky and should be studied by central banks.
According to the data from Capital.com platform we see that all these events had an impact on our users as well. The amount of opened short positions on CFDs on cryptocurrency is rising, however on the other hand, the amount of trades in general is reducing. From March 9, the amount of trades with CFDs on cryptocurrencies went down by 30%.
It is good to know that there is an opportunity to benefit as an investor, not only from price growth, but from price decline as well. Opening short (sell) positions on CFD (contract for difference) platforms, like Capital.com, is one way to do so. The benefits of trading CFDs on cryptocurrency include segregated accounts, account security and broker services, which are regulated by a financial regulator.
It is important to trade with regulated companies that follow regulations and policies to protect their clients.
It’s important to remember that you trade at your own risk. You can lose all your invested capital once you begin trading. Do not, in any circumstance, trade with money that you can’t afford to lose. It’s worth noting that trading is risky and you should not trade with money you can not afford to lose.
Capital.com is a fintech startup providing an AI-powered trading platform designed to take trading to the next level. Available on both desktop and smartphone, the trading platform lets users trade CFDs on the world’s top markets including Forex, cryptocurrencies, commodities, indices and more. The company received a $25 million investment from VP Capital and Larnabel Ventures. Capital.com is licensed by CySEC.