The Ups and Downs of Crypto – An Analysis by IronX
EU money laundering laws were recently passed that could impact the cryptocurrency market. After years of debate surrounding the identification and prevention of fraudulent activities especially in nations like Malta, Latvia and Estonia, these regulations propose to identify ownership of businesses and users behind crypto payments, IronX reports.
Many figures dispute that such laws may be considered outdated, especially in such a fast-paced financial industry where offenders find intricate ways of transporting criminal cash across borders. The updated laws encourage a more centralized banking system that enables national security to be more informed about the hidden criminal goings-on. Security and fairness is being handled pretty well by the banks and central banks, however further collaboration with central institutions will be required in order to fully comply with the new laws.
Many investors shy away from cryptocurrencies due to their volatility. Sometimes, they prefer to invest in fiat currencies which are less risky assets and offer a more trustworthy investment. According to IronX, China’s decision to ban cryptocurrency trading triggered many movements in the market. For instance, Bitcoin trading in Renminbi now represents less than 1% of global Bitcoin trades. Nonetheless, many believe this ban was for the best, especially considering how Bitcoin recently dropped 65% in price since the start of the year as well as the increasing amount of cyber theft occurring in Asia.
Following a study analysed by IronX, it is safe to say that Initial Coin Offerings (ICOs) are lacking in long-term growth. The study found that more than 50% of ICO coins lose value after 3-4 months and success is only achieved during the first few days of trading as the enthusiasm is usually increased during this period. It is worth noting however, that not all ICO ventures are failures. It is just important that investors learn the ins and outs of the project before diving in.
On a brighter note, IronX proclaims that there has been much enthusiasm over blockchain-based wallets, especially following Anthony Di Iorio’s (Ethereum co-founder) announcement that these wallets could make anyone ‘be your own bank.’ On the plus side, these digital wallets will be based on decentralized technology, which highly prevents cyber-attacks – an aspect that deviate many potential investors worldwide.