By Sumit Vohra
Who would have thought that a currency first introduced in 2009 by an unknown inventor could make trends 8 years later in 2017? Not only it took the financial markets by surprise, everyone from the biggest investment firms to national governments of almost every country were affected by the sudden and exorbitant increase in trade and value of these cryptocurrencies. With almost 1400 types and an appreciation of 1200% in its value this year, it has occupied a market capital of 696 billion dollars, that’s roughly 4 times the value of giants like Apple and greater than the GDP of almost 180 countries.
Top 5 cryptos which lead the market of virtual currencies in 2017
1) Bitcoin was the first cryptocurrency to be introduced. Launched in 2009 by a shadowy creator named Satoshi Nakamoto, it remains a go-to leader of the space. As of this writing, the market cap of the world’s top virtual currency is more than $252 billion, with a price per coin of nearly $15,000. There are roughly 16.7 million BTC in circulation, according to coinmarketcap.com.
2) With a market cap of $106 billion, Ripple became the second most valued crypto after taking over another well-established crypto called Ethereum. It became one of the most investable digital currency of 2018 according to coinmarketcap.com. With a circulation of 38 billion and unit value of around 3$, its one of the largest circulated cryptocurrency outperformed every other crypto with an increase of 36000% in its value in 2017.
3) Yet another cryptocurrency which made an impact in 2017 is Ethereum. Launched in 2015, it has quickly escalated as far as price and market cap is concerned. with a market cap of 85$ billion and price of 881$ its the third most valued in terms of price per coin after BTC and Bitcoin cash and third in terms of total valuation behind Ripple.
4) Bitcoin Cash, a cryptocurrency that emerged after a scalability split on Aug’17 from its parent currency Bitcoin seems to be no far from other top performers. It’s the 4th most dominant digital currency when it comes to market cap with Bitcoin cash occupying a net capital of 46 billion dollars. It comes second after Bitcoin with a unit value of 2700$. It has a rough circulation of around 16 million at time of writing.
5) Cardano is a currency which is quite new to the market. Launched on Sep’17, Cardano is a decentralised public blockchain and cryptocurrency project which is a fully open source. It has a market value of 25 billion dollars and coin price of around 1$, its current distribution is at an all-time high of 25 billion units.
Not a simple gamble
Though opinions on Bitcoin as a currency were mostly divided, however, one thing is clear: most of the governments are in no mood to accept cryptocurrencies as a legal tender in near future.
In the U.S., the Securities and Exchange Commission and the Commodity Futures Trading Commission have sent out a flurry of announcements in the last few months on the subject, including some bold statements by Jay Clayton, the SEC chairman. “Where we see fraud, and where we see people engaging in offerings that are not registered, we are going to pursue them because these types of things have a destabilizing effect on the market,” said Clayton at a meeting at the Federal Reserve Bank of New York at the end of November.
With Chinese government banning the cryptocurrency exchanges completely last September and the Indian government warning against the crypto exchange continuously, others are taking steps in similar directions. Nations like South Korea are on their way to implement new regulations, banning anonymous cryptocurrency transactions completely by Jan 20. Even the small economies aren’t way behind with Bangladesh, Bolivia, Ecuador, Kyrgyzstan, and Nepal completely banning the bitcoin.
A two-way road for some
While some are adopting harsh measures, other governments seem to go a bit creative by developing their own blockchain currencies. With reports of “cryptorouble” in development, the Russian government is adopting an optimistic approach towards cryptocurrencies. At a recent meeting of the Russian government officials, President Putin’s economic advisor, Sergei Glazev, said cryptocurrency could be used to carry out “sensitive activity on behalf of the state”, according to the Financial Times. “We can settle accounts with our counterparties all over the world with no regard for sanctions,” Mr Glazev reportedly said.
In September last year, Japan, Sweden and Estonia all announced similar digital currency projects: J-coin for Japan, E-krona for Sweden and Estacion for Estonia. The roster doesn’t stop there—the UK, Uruguay and Kazakhstan have all expressed similar ambitions.
With price skyrocketing, governments like the Venezuelan government are looking at cryptocurrencies as a way to get out of their financial crises. Venezuelan President Nicolas Maduro surprised many earlier in December last year when he announced the “petro” cryptocurrency, to be backed by OPEC member Venezuela’s oil, gas, gold and diamond reserves. “It will be materially impossible for the dictatorial financial centers of the world to intervene against this initiative. It will allow us to overcome any financial blockade,” said the Communications Minister and Former Vice-president Jorge Rodriguez.
Mixed reactions all over
Every government seems to be adopting its own unique methods of dealing with the sudden boom, regulations are being brought up by many governments in order to have some kind of control over such a decentralised system of blockchains. With concerns about cryptocurrencies being extensively used by money-launderers, drug traffickers and terrorists, the European governments are trying their best to push for Bitcoin regulation. “I don’t like it; it can hide activities such as drug trafficking and terrorism,” said the French Finance minister, Le Maire on television.
Under the EU-wide plan, online platforms where bitcoins are traded will be required to carry out due diligence on customers and report suspicious transactions. The UK government is negotiating amendments to the anti-money-laundering directive to ensure firms’ activities are overseen by national authorities.
Though governments are trying their best to regulate the sudden spike in both the valuations and exchanges of these cryptocurrencies, a stable situation seems to be far along the road.
Featured Image Source: fdecomite on VisualHunt / CC BY
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