The Crypto Daily – Movers and Shakers – May 2nd, 2021

The Crypto Daily – Movers and Shakers – May 2nd, 2021

A bullish start to the day saw Bitcoin rise to an early morning intraday high $58,326.0 before hitting reverse.

Falling short of the first major resistance level at $59,260, Bitcoin fell to a mid-afternoon intraday low $57,000.0.

Steering clear of the first major support level at $54,534, Bitcoin revisited $57,900 levels before easing back.

The near-term bullish trend remained intact supported by the return to $58,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $27,237 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was a mixed day on Saturday.

Binance Coin (-0.43%), Cardano’s ADA (-0.13%), and Crypto.com Coin (-2.35%) saw red to buck the trend on the day.

It was a bullish day for the rest of the majors, however.

Bitcoin Cash SV rallied by 12.35% to lead the way, with Chainlink and Ethereum seeing gains of 8.13% and 6.20% respectively.

Litecoin (+1.99%), Polkadot (+0.89%, and Ripple’s XRP (+3.31%) also avoided the red.

In the current week, the crypto total market fell to a Monday low $1,778bn before rising to a Saturday high $2,229bn. At the time of writing, the total market cap stood at $2,188bn.

Bitcoin’s dominance rose to a Monday high 51.73% before falling to a Saturday low 49.10%. At the time of writing, Bitcoin’s dominance stood at 49.24%.

Government regulation of Crypto

Government regulation of Crypto

Published Saturday, May. 1, 2021, 9:01 am Join AFP’s 100,000+ followers on Facebook Purchase a subscription to AFP Subscribe to AFP podcasts on iTunes and Spotify News, press releases, letters to the editor: augustafreepress2@gmail.com Advertising inquiries: freepress@ntelos.net

Cryptocurrencies are rebellious assets. They go against mainstream finance that is based on fiat currencies. Analysts have argued in length that Bitcoin’s fundamentals do not support a higher valuation. Yet, Bitcoin, in all defiance, traded above $60,000 per unit recently before dropping afterwards. Bitcoin, along with other cryptocurrencies are the epitome of change, and governments are hardly prepared for it.

Aside from taxes, governments still lack the tools to regulate cryptocurrencies

Not only are the Fed and other central banks not prepared to deal with cryptocurrency, but they also still do not have the tools to do so either. By concept, cryptocurrencies are not central. Not only do they not fall under the jurisdiction of any central bank, but they do not fall under the control of any central government, either. Cryptocurrencies are extra-national and do not acknowledge political borders. They are built on networks that can extend across several continents. That is why one approach to regulate crypto is to regulate crypto exchanges such as Coinbase, Binance, and others which enable the online trading of cryptocurrencies. Traders can also use contracts for difference to trade the price movements of cryptos on platforms like easyMarkets, which are already regulated.

U.S. regulatory institutions are working on developing a framework

For governments that are stuck with their old systems and ways of doing things, it seems that reining in cryptocurrencies is elusive. Several authorities in the US for example, are working on forming a clear regulatory framework for Cryptocurrencies. Those authorities are the Securities and Exchange Commission (SEC), the Commodities and Futures Trading Commission (CFTC), the federal trade commission (FTC) and the department of the Treasury with its sub-departments. However, this cooperation has not yet been fruitful. No clear rules have been made regarding cryptocurrencies, and politicians do not seem to be in a hurry.

Different countries have different approaches to regulating cryptocurrency. China, for example, had banned initial coin offerings to prevent capital flight and fight potential money laundering. Then recently, China launched its own digital currency, which is an effort to keep developments in this domain under its control. Japan, on the other hand, did not find cryptocurrencies to be illegal.

Regulatory challenges

The challenges in regulating cryptocurrency come from different angles. The first is the fact that governments do not control the supply like they do in the case of fiat currencies (central banks can always print more money or use their monetary policy tools to stimulate inflation or limit it; they cannot do that with cryptocurrency). The second challenge is related to governments’ inability to collect taxes on cryptocurrency holdings when the holder is anonymous. The third, which is mentioned above, is the difficulty of countering criminal activity such as buying illegal items or services online with cryptocurrency. The anonymity of cryptocurrency makes it very difficult for governments to have any level of control.

This is why, in December 2020, the U.S. Financial Crimes Enforcement Network (FinCEN) proposed a new regulation that makes it possible to trace Bitcoin transactions, related to private wallets. Money services providers would be required to “submit reports, keep records, and verify the identity of customers in relation to transactions involving convertible virtual currency (“CVC”) or digital assets with legal tender status”. This should make it easier for the government to identify perpetrators of wrongdoing.

Conclusion

While cryptocurrencies have made some traders rich, they still cause headaches to governments. Many governments have already begun their rulemaking efforts to keep things in check. However, they still have a long way to go.

Story by Anne Holder

Related

Comments

Crypto’s Shadow Currency Surges Past Deposits of Most U.S. Banks

InvestorPlace

My initial reaction to this question is to go with the former rather than the latter. In part, it’s because I called Fisker (NYSE:FSR) stock a buy at $15 in early April. Source: T. Schneider / Shutterstock.com Since then, FSR stock has proceeded to blow through that bogey all the way down near $12 before rebounding in recent days. It’s trading around $13.50 today. Now I’m just as confused as everyone else following Fisker.vTo make matters worse, I recently discussed why Lucid Motors — soon expected to merge with Churchill Capital Corp IV (NYSE:CCIV) — couldn’t hold a candle to Tesla (NASDAQ:TSLA). InvestorPlace - Stock Market News, Stock Advice & Trading Tips If Lucid’s not worth $33 billion at this stage of its development, I’m left wondering about Fisker’s true value. 10 of the Top Nasdaq Blue-Chip Stocks to Buy Big bargain? Falling knife? The truth is Fisker’s a little of both. Here’s why. FSR Stock Is a Major Bargain According to Fisker’s 10-K, the company had 157.7 million Class A shares outstanding as of March 22 and 132.4 million Class B for a total of 290.1 million outstanding. Based on a share price of $13.83 as I write this, it’s got a market capitalization of $4.0 billion or about one-eighth the value of Lucid. According to the eight analysts providing a revenue estimate for 2022, Fisker should generate $355 million in sales. As I said in my April 27 article about Lucid, its sales projection for 2022 is $2.2 billion. At the moment, these two numbers are nothing but estimates. Neither has produced any revenue to speak of and won’t until later in 2021 or into 2022. So, for those who haven’t read my article, the $33 billion market cap for Lucid is based on 1.6 billion shares outstanding and a share price of approximately $20.63. CCIV has since gained a couple more dollars, so the valuation keeps moving higher. InvestorPlace’s Luke Lango recently discussed the rumors of a Lucid tie-up with Apple (NASDAQ:AAPL). He believes Lucid could be the next Tesla. Personally, I thought that title had already been awarded to Nio (NYSE:NIO). However, if you want to learn more about the possibilities on this front, I suggest you take a look at his commentary. I’m not going to lie. Even the sniff of an Apple partnership is going to light a fire under any stock. So, it’s understandable why CCIV has been moving higher. But a $37 billion market cap? Let’s get a grip. According to page 33 of Fisker’s latest presentation, it projects an annual volume between 200,000 and 250,000 units by 2025. At a $50K selling price, that’s $12.5 billion in revenue at the high-end of the projection. Lucid expects to deliver 251,000 vehicles in 2026 at an average selling price of almost $91,000 for $22.8 billion in revenue. Assuming both hit their targets (which ain’t gonna happen) Fisker’s 2025 forward price-to-sales ratio is 0.32x compared to 1.6x sales for Lucid. Fisker currently has a multiple one-fifth Lucid. Apple or not, the $50,o00 car has a better shot at hitting the target than a $91,000 version. Just saying. Fisker Could Be Single Digits Soon Enough One of my favorite InvestorPlace contributors when it comes to technology write-ups is Dana Blankenhorn. He’s spent years covering the tech sector and usually has a zinger or two that really cuts to the heart of the matter. He recently discussed why an investment in Fisker at this point is real speculation. He compared Fisker to Preston Tucker and the failed Tucker automobile. I did like the movie about the dreamer. That Jeff Bridges sure can act. But I digress. “I’ve compared Fisker with Preston Tucker, whose company failed. (At least Tucker got a good movie out of it, directed by Francis Ford Coppola, whose wine company succeeded),” Blankenhornwrote on April 26. “This was a little unfair. Tucker was selling dreams into a mature market. Henrik Fisker has been selling real designs into a new market.” The reality is that Henrik Fisker has already failed once in his attempt to bring an electric vehicle to market, something my colleague mentions in his article. So, it’s not surprising there is some cynicism from analysts about Fisker’s asset-light, design-heavy business model. I believe that he learned a thing or two from his 2007 failure and that will hold him in good stead as he brings the Fisker Ocean SUV to market. But as Blankenhorn rightly states, the risk of losing 100% of your Fisker investment is real. It might be wise to wait things out with the stock down 16% over the past month and 57% since its February highs. The Bottom Line I have to admit that I’m rooting for Henrik Fisker and the Fisker Ocean. I’m hopeful that Foxconn will come through and actually build electric vehicles in America. The more, the merrier, in my opinion. In my last article about Fisker in early April, I argued that if you could buy around $15, the risk/reward started to work in your favor. Trading below $14 at the moment, I view the risks of owning Fisker to be less than that of Lucid. Sure, Lucid has an impressive management team, but it still has to execute. If you’re a speculative investor, I don’t think there’s any question FSR stock is a better buy. I view Fisker as a big bargain. Time will tell if I’m right. On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post Fisker Stock Looks More Like a Bargain Here Than a Falling Knife appeared first on InvestorPlace.