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Regulation still a major hindrance, but volatility booster for cryptocurrency prices

From the perspective of institutional investors, market turbulence creates an uncertain environment, and many are waiting for clarity from regulators in the optimism that it will contribute to a reduction in volatility.

Meanwhile, those who wish to test the water without holding the asset are restricted to futures contracts, and the promise of ETFs. 

The SEC has, so far, declined most of the bitcoin ETF proposals, with its primary concerns being the potential for market manipulation and a lack of traditional means of detecting and deterring fraud. And what goes for bitcoin goes double for altcoins. With very low liquidity, altcoins remain vulnerable to market manipulation and low market cap coins in particular can suffer from slippage with large orders—or witness large price movements on so much as a single tweet.

Aside from traditional financial instruments, there is another route under construction for institutional investors wanting to enter the space. Stablecoins are a particular type of altcoin that combine the core values of cryptocurrencies like decentralization and security, with stability in price.

Thereby, the altcoins intend to overcome the volatility that is such an obstacle to mass adoption, and also boost the level of trust needed for institutional investors to participate in the market. Two of the biggest stablecoin projects—EURS and TrueUSD—have been unveiled coins that are pegged to the movement of their fiat equivalents, and backed by partnerships with governments and institutions. 

With price stability, fully-audited reserves and trusted partnerships, these projects may assist institutional money to enter the cryptocurrency marketplace. They won't themselves produce the returns of the more speculative alts — given their pegged nature — and instead will more likely find their utility in easing crypto on-ramping and off-ramping, and moving assets between exchanges.

This came in as a crystal-clear way, no matter where you are based, the blockchain industry needs regulatory certainty - frankly this is an industry wide requirement.

Some countries, such as, Singapore have made great progress, typically the conversation has been dominated by the US laws. The unintended consequences of some of EU/US regulations has been capital raising that has made really hard in other parts of the world — which is actually driving people to crowdfunding and Security Tokens as some of the few ways to address this.

Currency Strength Index: FxWirePro's hourly BTC spot index is flashing at -69 levels (which is bearish), while hourly USD spot index was at -113 (bearish) while articulating at (10:06 GMT).

For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex

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2018-12-17 08:05:13
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