How ESA actions affect cryptocurrency prices


August was, as usual, volatile for digital currencies of all kinds. At the beginning of the month, the price of bitcoin and ethereum, as well as other digital tokens, fell to some of the lowest levels of the year. BTC has since recovered and now trades above $ 6,700; ETH is still lurking at the time of writing this article, trading significantly below $ 300. In retrospect, many analysts have suggested that the reason for the decline in the cryptocurrency industry at the beginning of August was the shares of the United States Securities and Exchange Commission. The fall in prices mentioned above corresponded to the announcement that the SEC had decided to postpone its verdict on the approval of a fund traded on the bitcoin exchange (ETF) until the end of September.

This example is the latest in many cases where the SEC's actions appear to have influenced the prices of digital currencies. Indeed, in the last two years when digital tokens have become increasingly popular and widespread, the SEC has become a dominant presence in the daily cryptic cycle. Whether it's determining the status of digital currencies, regulating new products like ETFs or futures, or doing any number of other things related to the new hot space, the SEC has had a huge influence on the price of digital currencies. Below we will review some of the SEC's most important recent decisions and actions and how they have influenced the cryptocurrency market.

DAO tokens as illegal titles

In July 2017, the SEC announced its decision on DAO tokens, which had been distributed through the initial offer of coins in 2016, were in fact titles. These tokens had not been registered with the SEC before ICO, placing them in violation of the law. While immediate consequences have had an impact on DAO, the ramifications of this decision have been widespread; the SEC has shown that many Ico could be in trouble too. Although at the time of the decision the SEC did not pressurize, it actually changed the ICO game, which had been allowed to run freely without regulation for many months until then.

It is interesting to note that while the world of cryptocurrency has reacted to the news in a negative way, the overall impact has been minimal. According to Coin Telegraph, the first five coins fell in price on the day of the announcement, but they recovered their value relatively quickly

Winklevoss Demand for ETF denied

At the beginning of this summer, in July 2018, the SEC denied the second attempt by the Winklevoss brothers to launch a bitcoin ETF. On July 26, the SEC ruled that it was not convinced by the brothers' statement that bitcoin markets are "inherently resistant to manipulation," deciding to reject their efforts to launch an ETF for this and other reasons. The cryptocurrency markets reacted quickly and negatively; BTC lost more than $ 400 in just 3 hours. Many other coins have also decreased. However, the main digital currency by market capitalization has regained its value within 24 hours.

VanEck SolidX ETF denied

More recently, when the SEC rejected the announcement on the VanEck and SolidX ETF plans, the market was panicked. BTC lost around $ 500 in six hours and continued to decline in the days following the announcement. Undulation has lost more than 20% of its value. Interestingly, this news was decidedly neutral; the SEC did not indicate that it was rejecting the ETF, as in the case of the Winklevoss product. Instead, he simply announced that he would delay the announcement of his decision. However, the markets reacted strongly.

SEC and CFTC jointly recognize cryptocurrencies

In order to prevent the SEC from only being able to beat the encrypted prices, it is useful to look also at a previous example. In February 2018, the SEC and the Commodities and Future Trading Commission (CFTC) held a joint hearing on cryptocurrencies, Ico and blockchain. The regulators recognized the importance of the new industry, underlining that a fair regulatory framework was fundamental to its long-term success. The representatives also indicated that "if there had not been bitcoin, there would have been no blockchain".

Markets reacted with a strong uptrend. This happened at a crucial time, as China and India were moving to crack down on cryptocurrency and the markets had collapsed. Both BTC and ETH earned about 20% in the days following the hearing.

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