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Positive trends in cryptocurrency market

Jan 23, 2019

TOP-15 cryptocurrencies by capitalization show growth over the past 24 hours. Bitcoin Cash has got a record level of +7.5% and EOS +5%, and the outsider is Tether with a yield of less than 1%.

Several fundamental factors contributed to the general optimism in the cryptocurrency market, as well as the discussion of this market at the International Economic Forum in Davos.

United Nations: Cryptocurrencies is a “New Frontier” in Digital Finance

In the last report on the global economy, the UN named cryptocurrency as a “new frontier” in the field of digital finance. The organization noted an increase in the popularity of cryptocurrencies, as well as the great benefit of blockchain technologies. This is excellent news for the market, as any positive mention at the high level contributes to popularization and an increase in trust.

Nowadays, the trust remains the key factor for the cryptocurrency market. Many experts note the necessity of the infrastructure development and the depth of regulation of this market in order to attract institutional investors.

The UN noted that blockchain technologies already provide solutions for registration of property rights, identity, evidence of the origin of medicines and other goods, as well as their movement. This allows to significantly reduce bureaucracy, creating new business models, thereby increasing management efficiency.

Such UN statements help to attract new investments in the blockchain development and its implementation at the state level, as well as in existing business.

Increase in transaction volumes of Ethereum

The published analytical report of the Diar company indicated that in December 2018, the volume of ETH transactions reached a maximum value since the middle of 2016.  

It is also noteworthy that during 9 months of 2018, the transaction volumes were very low. At the same time, the volumes sharply increased in November and December, more than twice than the lows, despite the decline in the price of ETH.

The December record was set at 115 million ETH. However, in dollar equivalent, the record wasn’t set, amid a robust decline in the price of ETH, in comparison with the figures for 2017.

The increase in the number of transactions may indicate an increase in the popularity of cryptocurrency. This position points to a general improvement in the cryptocurrency market. However, the lack of a steady increase in the price of ETH questions this point of view.

We highlight that the last wave of ETH price reduction began on November 14, 2018, and ended in the middle of December 2018. Based on this, it can be assumed that ETH selling led to the marked increase in the number of transactions in the Ethereum network. This position is a bearish fundamental factor for the market and increases the risk of further price reductions in the medium and long terms.

CEO Nasdaq: Cryptocurrencies will find practical application and will be integrated into the economy

Adena Friedman, the CEO and President of the Nasdaq Stock Market, is optimistic about the long-term prospects for cryptocurrencies. She wrote in her LinkedIn that cryptocurrencies, and in particular Bitcoin “deserves an opportunity to find a sustainable future in our economy”.

In fact, it is difficult to ignore the fact that the cryptocurrency market and blockchain technologies have already made a significant change in the global economy. Therefore, Adena Friedman does not exclude that cryptocurrencies will find practical application and will be integrated into the economy. She also noted the efforts of Nasdaq, which has recently invested in important cryptocurrency companies and also plans to launch Bitcoin futures in 2019.

It serves as a fundamental bullish factor for the cryptocurrency market, holding prices from further decline. However, the market is still bearish.

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