The prices of cryptocurrencies continued their multiday slide Thursday morning as investors weighed recent comments regarding efforts to regulate the industry. Here’s how some of the most recognized assets were trading as of noon EDT:
Image source: Getty Images.
All three assets were still up by more than 50% over the past month, so it shouldn’t concern holders that they are giving back some of those gains. What may be of concern are the perceived attitudes of government leaders toward cryptocurrencies. Regulation could play a significant role in shaping the future of this asset class.
Negative comments have come from all over the financial establishment. Earlier this month, the new chairman of the Securities and Exchange Commission called for more investor protection, likening the crypto market to the Wild West. Treasury Secretary Janet Yellen, the former Federal Reserve chair, has been more measured in her public remarks. While she has called Bitcoin a highly speculative asset, she has also acknowledged crypto’s possible benefits such as safer, cheaper, and faster transactions.
A more tangible threat could be the infrastructure bill making its way through Congress. The bipartisan legislation could include a measure that would require many cryptocurrency developers to begin reporting information on their tokens’ users. The design of cryptocurrencies makes that virtually impossible.
At this point, the investing community has gotten accustomed to the volatility of digital assets. Two data points may indicate that the current sell-off will be short-lived.
Chainalysis — a firm that collects data on the use of blockchains and cryptocurrencies — has pointed out that those with digital wallets holding more than $50 million have been net buyers of Bitcoin since the end of June. A different report by Blockchain.com shows that the hashrate — the total combined computing power being used to process transactions and mine coins — is quickly recovering after China’s recent crackdown on crypto mining. Headlines have often driven the price moves of tokens over the short term. Investors should expect that to continue.
10 stocks we like better than Dogecoin
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Fintech Zoom Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Dogecoin wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of August 9, 2021
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.