MarketWatch: Bitcoin, Ethereum, Ripple and Bitcoin Cash

Most of the digital currencies went into the red on Tuesday, but they have been bullish during the last month. Here's our analysis...

David Nurieli
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The cryptocurrency markets have been bullish over the last thirty days. Bitcoin (BTC) has managed to climb back up, after yesterday's negative dip, to rise back above the $9k mark. At the start of April, Bitcoin was priced at $6,856, but as we entered May, the crypto was $9,072 - a rise of $2,216 making it the best month of the year for crypto. Bloomberg reports that this is the narrowest trading range in about six months. This has Bitcoin technical analysts scouring price charts to help figure out if the biggest cryptocurrency is poised to build upon its April rally.

“The market is not sending off strong signals as we speak as to the direction of the next major move,” Rich Ross of Evercore ISI said. Though the bigger trend is higher, he said “Bitcoin is likely to remain violently sideways until a new trend emerges."

Over the past year, Ethereum (ETH), the second largest cryptocurrency, has seen its valuation steadily increase to 71 billion and continues to keep a steady pace breaking through to the $719 per share mark as of this morning. Ethereum has had some backlash recently, as the Security and Exchange Commission (SEC) believes that it should be classed as a security and not a utility.

"We spent a tremendous amount of time with lawyers in the U.S. and in other countries, and are extremely comfortable that it is not a security; it never was a security," said Ethereum co-founder, Joseph Lubin in New Orleans.

The Chairman of the U.S. Commodity Future Trading Commission (CFTC) thinks that the federal government has no clear and comprehensive legislation in development. "We see elements of commodity in it that are subject to our regulations, but depending on which regulatory regime you're looking at, it has different aspects of all of that," Giancarlo said.

The Howey Test considers an instrument to be a security if it displays certain features: like whether profits depend on the actions of a third party or whether the instrument represents an investment in a common enterprise. Gensler says the common enterprise in Ethereum’s case is the Ethereum Foundation.

While the SEC is focusing its attention on Ripple and Ethereum, which is causing the crypto markets to react, the chances of Ripple and Ethereum to be classed as a security are remote, according to securities lawyers.

“It’s highly unlikely they’ll go back and impose some onerous burdens. It would be very unusual for a regulator to go back in time and say you should have thought three or four years ago when you started that this was a security,” said Phil Lookadoo, a commodities lawyer with Haynes and Boone. In an article posted by Fortune, he said,“to single out one or two cryptocurrencies because of the way they were formed would be picking winners and losers. It’s not the sort of thing the SEC would want to be doing.”

Ripple (XRP) on the other hand has been having a slightly more turbulent time, starting off in April at a low $0.45 increasing to todays value of $0.85. Over the last few months, Ripple has peaked at $2.40 causing its argument to be a middle or a bridge currency as defined by Ryan Zagone, Director of Regulatory Relations.

On Tuesday, the UK Parliament hosted a meeting on the state of Digital Currency. Martin Walker, director for the non-profit Centre of Evidence Based Management, criticised Ripple's current product set. He believes that XRP was volatile, having fluctuated by 80% in the last two months and not a bridge between two currencies in an international transaction.

Walker explained that, “you need someone to provide the liquidity to be able to change into and out of Ripple. And holding Ripple, a currency which has seen its price drop 80 percent and then back up 100 percent in the course of the last two months is just not credible. So, putting cryptocurrencies into the financial sector is a huge source of risk."

Meanwhile in Hong Kong, the Financial Services and Treasury (FSTB) has completed its report and has determined that cryptocurrencies have had little impact in organised crime. It states, “We have not found substantial risks in these newly developing payment methods or commodities, this is a rapidly developing area requiring continued monitoring. There does not seem to be any visible impact affecting the overall risk in Hong Kong so far.”

Bitcoin Cash (BCH) has increased significantly over the last thirty days, starting at 699.05 per share on April 1st to settling today at $1473.01. The currency jump could be attributed by being added to the London Block Exchange.They recently added the fourth largest cryptocurrency.

In a press release, CEO of the Exchange Benjamin Dives said, "As we open our doors to UK crypto enthusiasts, we’re listening and acting on what the community wants - and that’s an array of good quality coin options to trade; all backed by a reliable, comprehensive and user-friendly service that they can trust."