Regulation Worries Emerge as Crypto Markets Advance
Ethereum's (ETH, Tech/Adoption Grade “A”) long-awaited London hard fork has finally been activated. Even as I write today’s issue, our analysts have already been hard at work, doing what they do best — answering the most important questions surrounding this crucial update.
One of these questions is how this hard fork would affect the price of ETH: Will it push the cryptocurrency higher, or has the fork already been priced in?
Earlier this week, we asked you this very same question, and here’s how you responded:
#Ethereum's London hard fork is expected to arrive in less than 24 hours, ushering in EIP-1559.
— Weiss Crypto (@WeissCrypto) August 4, 2021
Is this upgrade baked into the price of $ETH already?#EIP1559 #ETH #LondonHardFork
Needless to say, this is a topic that may not have such a clear-cut answer. I especially like how our reader, @InvestJason, responded:
No-one knows for sure!
— JasonInvest (@InvestJason) August 4, 2021
I plan to hold on to my significant ETH investments for the long term.
My short term trades are protected by Stop Limit orders to allow me to reap the benefits of a pump and limit the damage from a dump!
After weeks of sideways trading and downward action across the board, it certainly pays to be careful yet optimistic.
But what does EIP-1559 (short for Ethereum Improvement Proposal 1559), ushered in by the London hard fork, truly bring to the table? Why is it significant?
Here’s our take:
2/ EIP-1559 will now usher in a new era of lower fees for the Ethereum network, alleviating what has been one of the biggest issues with Ethereum over the last year or so. Additionally, with the burning of tx fees this upgrade effectively lowers the supply rate of Ethereum.
— Weiss Crypto (@WeissCrypto) August 5, 2021
Are you excited about what’s coming for ETH in the days ahead? We sure are.
But not all news last week was good:
1/ Buyers lost 344 #ETH on failed transaction fees during launch of Ashton Kutchers's project - Stoner Cats. The team wrote a poor smart contract where gas limit was not set correctly, which led to failed transactions and wasted fees. (THREAD) #StonerCats
— Weiss Crypto (@WeissCrypto) July 30, 2021
Although the majority of comments on this tweet came from our Cardano (ADA, Tech/Adoption Grade “B-”) fans, touting ADA as a better alternative to ETH, our take was a bit different.
Our opinion: All this could’ve been avoided if the development team reviewed their code properly, or at least took responsibility after the damage was done and reimbursed the affected parties.
In another negative twist, regulators seem to have well and truly caught up with Binance:
2/ ...to start taking these regulations more seriously. The #crypto landscape is changing; as it grows in size and importance, we can expect more countries to follow suit.
— Weiss Crypto (@WeissCrypto) August 2, 2021
It seems like Binance’s running days are over. We hope this will turn into a positive, with the exchange aligning more closely with regulatory demands ... at least those that benefit the end user. Because smart, informed regulation can help promote widespread crypto adoption.
This statement, however, does come with a disclaimer: Not all regulation is good. You see, regulators don’t often have the expertise necessary to understand the full breadth and depth of crypto — a shortcoming that ultimately does more harm than good:
#Cryptocurrency figureheads are rebutting comments made by #SEC Chair Gary Gensler who laid out the narrative against every crypto except #Bitcoin as being a security. How did the market respond? #Ethereum and most #DeFi tokens are up big today, calling the bluff of regulators.
— Weiss Crypto (@WeissCrypto) August 4, 2021
Although markets remain unphased, this type of continuous regulatory uncertainty and overregulation will eventually result in long-term consequences that could have a far greater impact on countries that impose them — in this case, the United States:
2/ If the United States wants to be a leader in the crypto space they must start to embrace crypto, nurture it and help it grow, else they risk losing companies to countries with more favorable regulators.
— Weiss Crypto (@WeissCrypto) August 2, 2021
Sometimes, however, it’s not the regulators but the banks that turn out to be overzealous in protecting their turf against the inevitable crypto tide.
This was the case with Russian SberBank, which froze one user’s account due to it being used in crypto trading:
2/2 It's good that this court case got media attention as it may show to other Russian banks that resistance is futile.#BTC $BTC
— Weiss Crypto (@WeissCrypto) August 4, 2021
Next week is bound to bring much needed volatility to the markets ... and, hopefully, more positive price action will come along with it.
So, if you’re a member of one of our services, keep your eyes on your inbox for critical updates. If you’re doing this on your own, I recommend subscribing to our free daily updates to stay in the know for all things crypto.
Until next week, stay safe and trade well.
Jurica Dujmovic