Brace yourselves, crypto winter is coming! Some think that this cold spell might last much longer, but why are others maintaining bullish forecasts? Here’s what you need to know.
First up, check out this snapshot of how bitcoin and its buddies have fared in the past seven days as of December 14, 00:11 am GMT.
Another week, another set of losses for cryptocurrencies, huh? But hey, look at Tether holding on to a bit of green!
Mixed bitcoin forecasts
Glass half-full? Glass half-empty? Or does it hold water at all? Big names in the industry have mixed views on where bitcoin might go from here.
For hardcore bitcoin bull Tom Lee of Fundstrat, the fair value of bitcoin is between $13,800 and $14,800. That forecast is based on the number of wallet addresses, usage per account, and other factors affecting supply.
Furthermore, Lee projected that mass adoption of bitcoin and its acceptance as an asset class could bring the value per coin to $150,000 once the number of active wallets comes close to the likes of Visa, MasterCard and PayPal. As it is, there are roughly 50 million active crypto wallets while Visa and MasterCard have 4.6 billion and PayPal has 254 million accounts.
CEO of cryptocurrency merchant bank Galaxy Digital Mike Novogratz, also another bitcoin bull, noted that “revolutions don’t happen overnight” and that bitcoin is still poised to be digital gold.
In contrast, Harvard University professor and former IMF economist Kenneth Rogoff suggested that bitcoin’s future value might be closer to $100 than $100,000. He wrote:
“The right way to think about cryptocurrency coins is as lottery tickets that pay off in a dystopian future where they are used in rogue and failed states, or perhaps in countries where citizens have already lost all semblance of privacy.”
Rogoff dismissed the idea of bitcoin as digital gold as nutty, citing that bitcoin has no alternative use and that decentralized ledger systems are less efficient than those of a trusted party like a central bank.
Basis shuts down
And so it begins. There’s no denying that the crypto winter has been tough on a lot of companies in the space, leading some firms to lay off employees or scale down operations in order to cope with the slide in prices.
Not even the industry’s top-funded stablecoin startup founded by three Princeton honors students, Basis, was immune from troubles as it confirmed that it will be shutting down due to regulatory constraints.
Recall that this startup, which was backed by Google Ventures, Andreessen Horowitz, Bain Capital and others, promised to launch a new cryptocurrency designed from scratch into a vision of decentralized finance.
According to CEO Nader Al-Naji in an interview with Forbes:
“The SEC generally avoids saying that something will definitely be one way or the other. But from that meeting we got the impression that we would not be able to avoid securities classification.”
Furthermore, Al-Naji wrote on the company website:
“Although this isn’t the outcome any of us wanted, we knew going into this that we were fundamentally making a binary bet on a favorable regulatory landscape.”
Financial industry watchdogs are still pressing on with their efforts to gain a better understanding of the industry in order to better protect consumers from fraudulent activity.
This time, the CFTC announced that it’s interested to know more about ethereum, issuing a Request for Input (RFI) for public feedback on different questions about ethereum. According to the press release:
“The CFTC expects the comments and information received will benefit LabCFTC, the CFTC’s FinTech initiative, and help to inform the Commission’s understanding of these emerging technologies.”
The CFTC also mentioned wanting to get to know bitcoin better and how it differs with ethereum in terms of “opportunities, challenges, and risks.”
Just be warned, there is a considerable amount of risk in trading cryptocurrencies due to their inherent volatility and sensitivity to headlines. Be careful out there!