The Market was looking very strong Earlier today.
We had a very strange kind of double-ascending channel. Even if we broke support on the top one we could still fall back to the latter.
A few hours ago the market "flash-crashed" to this lower support line. The market is showing some signs of weakness. The fear of a bounce off ATH resistance is real.
Coinbase CEO: Trump Administration May ‘Rush Out’ Burdensome Crypto Wallet Rules
Last week we heard rumors that the U.S. Treasury and Secretary Mnuchin were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term. I'm concerned that this would have unintended side effects, and wanted to share those concerns.
These regulations would require KYC for every wallet that American Exchanges send crypto to; meaning that you would not be able to withdraw from American exchanges without registering that wallet with Coinbase who would then register it with the IRS.
This is a terrible idea for obvious reasons, and a perfectly predictable outcome. The establishment is continuing to tighten their grip across all sectors and dictating this "new normal". It's really only a matter of time before something like this becomes law.
When someone evades taxes using cryptocurrency the IRS needs evidence to support that certain wallets belong to certain people. This regulation would accomplish just that. However, what it fails to take into consideration is that decentralization is explosive and disruptive.
Regulations like this will just create demand for other onramps into crypto; ones that are much much harder to track. Imagine someone paying for Bitcoin with cash or random transactions on Venmo or Paypal. Try as they might, they aren't going to be able to regulate this space and will only serve to choke out corporations.
The overhead cost of doing these invasive KYC requirements puts a large burden on United States exchanges. I imagine they will fight against such nonsense in court and on the battlefield of politics and lawmaking via lobbyists. Not sure if they will win or not but it should be interesting nonetheless.
Conclusion
Again, a "dip" from $19500 to $17150 is only 12%. It also appears that the market may recover quite soon from this little setback. As I've said time and time again, news can only push the market in the direction it wants to go, and potentially temporary setbacks like this could evaporate in as little as a few days. I guess we'll see.
In the long run, these actions will only serve to hamstring the centralized authorities that issue them in the first place. Regulations like this one proposed will create a vacuum in the market and place strong demand on privacy features.
Regulators think they can stop the black market from moving into this sector. What a foolish notion; they are the ones creating the black/grey markets with their rules. At least with Silk Road it was easy to convince Average Joe that drug dealers are bad. It's a bit harder to convince people that privacy is bad when corporation after corporation gets hacked for all their data.
If we truly are at the top of this bull run, news like this will send the market tumbling down for a while (probably until we hit the doubling curve at $15k in Feb). However, again, I just think this little dump is simply a welcomed retracement in a market that's done nothing but go up for over a month. I still think we have at least another month of 'up' to go. Here's to hoping I'm right.
Posted Using LeoFinance Beta
Return from Trump Administration Teases Regulation and Crashes the Market? to edicted's Web3 Blog
