In an environment where the stock markets are witnessing a strong downtrend, the digital currency space is not an exception as the negative momentum has also been witnessed in that space. The global stock markets are being impacted by several macroeconomic factors like trade battle as well as the concerns revolving around the oil demand. Bitcoin, a digital currency, witnessed strong negative momentum and thus, breaking the crucial support level which was US$6,000. The strong selling momentum was witnessed in this digital currency along with other crypto assets. The market trackers have stated that from the past few days the investors were witnessing the consolidation and the bearish momentum was also visible. The lack of robust strength in the Bitcoin further impacted other cryptocurrencies like Ethereum. The sell-off which was witnessed in the cryptocurrencies severely impacted the market capitalization of the broader sector.
The market players are of the view that sometimes when things happen, the clarity of the true and the primary reason behind the occurrence of the event takes time. When seen from the broader perspective, the market trackers stated that the outlook for the digital currency is still unclear. They stated that the long-term expectations of the digital currency are dependent upon whether or not the digital currency becomes a viable payment mechanism or a reliable store of value. According to them, the Bitcoin is witnessing elevated levels of the institutional participation. For example, there has been higher demand with respect to the Bitcoin exchange traded funds or ETFs as well as increasing volumes of the Bitcoin futures. However, the market participants also stated that the actual participation from the retail as well as institutional investors is still low.
Byte Power (ASX: BPG) has been dealing a problem regarding the cryptocurrency exchange because of the ASIC or Australian Securities and Investments Commission’s new strict rules. As per ASIC, the company’s tokens can be treated as the regulated managed investment scheme. However, the company is not agreeing about this. The company is in the process of selling Byte Power X Loyalty Tokens with respect to the loyalty program so that it can garner the capital. The company stated that the user of the company’s crypto exchange would be getting a discount of 40% with respect to the commissions. However, the ASIC is objecting and stated that an ICO or Initial Coin Offer can be treated as the managed investment scheme if:
- Participants are making the contribution of the money or assets so that they can get an interest in the scheme
- Of the contributions, if any of them is being pooled or being utilized in the common enterprise for the financial benefits or for the interests in the property
- If the people who have made the contributions are not having the day-to-day control on the scheme’s operations but sometimes have the voting or similar rights.
The ICO is similar to the process of the IPO or initial public offer but the ICO is for the cryptocurrency.
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