Bitcoin Popularity Grows, But Not Its Price
FxPro Financial Services Ltd | Jan 22, 2019 11:11AM ET
The cryptocurrency market lull continues. The main altcoins show flat price dynamics, but on the background, we see reports that in 2018 Bitcoin network had $3.2 trillion transactions value. The popularity of benchmark cryptocurrency on the darknet (the shadow, often the illegal part of the Internet) in 2018 grew inversely to the decline of the entire market, the number of transactions in the Bitcoin network is also growing, as is the number of Bitcoin-ATMs around the world. Nevertheless, the growth of popularity does not yet have any specific impact on the dynamics of prices.
The fact is that market participants are frightened and repelled by the news about serious problems with security in the blockchain sector. So, recently it became known that the client's personal data of the world's largest crypto exchanges Poloniex, Binance, Bittrex and Bitfinex, which collected a full package of information about their customers as part of the “Know Your Customer” (KYC) practice during the spring of 2018, are sold on the darknet. Now hackers are stealing not only the money itself, but also the user data. Unsurprisingly that big business is waiting for guaranteed centralized solutions for the purchase and storage of digital assets.
Recently it also became known that the update of Ethereum network "Constantinople" was urgently cancelled when a critical vulnerability was found in the code. It was revealed that a hacker could demand payment for his work under a smart contract an unlimited number of times. It is noteworthy that the potentially serious negative news had no effect on the dynamics of ETH.
An interesting moment for cryptocurrencies is also associated with the suspension of the American government work. If it lasts until February 27th, then the first Bitcoin-ETF will automatically be approved. However, it is important to understand that even if this happens, it is hardly worth considering as definitely positive news, since the decision can be undone. Also, there is a negative experience of the past: a little over a year ago, the launch of Bitcoin futures in the United States did not save the market from a long correction.
Alexander Kuptsikevich, the FxPro analyst
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