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The emerging asset class of cryptocurrency is new, unproven, not yet widely adopted, or even understood. It’s led to much confusion for investors especially when it comes to regulation and tax preparation.

However, a new cryptocurrency-focused bull currently in front of Congress will “fundamentally restructure the way the United States treats cryptocurrency,” by grouping assets into three distinct types.

Cryptocurrency Redefined: Commodity, Security, and Currency

This week, Congress has been reviewing the proposed Crypto-Currency Act of 2020 and discussing the details of how the bill will change the future of the asset class.

Related Reading | Is the Coronavirus The Black Swan Event That Crushes Cryptocurrency?

The founder and CEO of Metal Pay, Marshall Hayner, spoke in front of Congress regarding the bill he and Representative Paul Gosar worked tirelessly on, and later took to Twitter to reveal some important details about what the bill is proposing.

Under the Crypto-Currency Act of 2020, the United States would recognize and classify crypto assets by three distinct types.

The first type of asset is “Crypto-Commodity” which is identified as “tradable, fungible, and digital assets” that exist on the blockchain representing contracts, utilities, and even real-world commodities.

Assets such as Bitcoin, Ethereum, and utility tokens would fall under such a category.

The second type of asset is “Crypto-Security” tokens, which are defined as an instrument existing on a blockchain network that is often tied to an external asset, such as a share of a company.

This category would contain assets issued on the blockchain that represent ownership of an external asset, such as the groundbreaking ERC-20 token issuance on the Ethereum blockchain this past week, where the tokens represent a portion of a $40 million investment made to Fatburger parent company Fat Brands.

The third and final type of assets, are “Crypto-Currency” tokens, which the Metal Pay founder says are stablecoins, designed to resistance money-laundering and counterfeiting, among other “common issues.”

Tether, USD Coin, Paxos Standard, the Gemini Dollar, and even Facebook’s Libra would fall into this category.

But Does This Bill Do More Harm Than Good?

However, the bill isn’t all positive for the space.

The Crypto-Currency Act of 2020 also proposes that any companies transacting with individuals related to cryptocurrencies will have their private and personal financial details and info shared with regulatory entities.

Cryptocurrency wasn’t just built for digital, peer-to-peer transactions or wealth storage, the asset class was also designed to be censorship-resistant and ensure privacy in the digital era.

This bill essentially cripples this important benefit of cryptocurrencies for investors in the United States.

Related Reading | How Fear and Greed in the Cryptocurrency Market Can Lead To Incredible Profit 

So while it does provide clarity on the different types of crypto assets, and less confusion is always a good thing, there may be better acts to follow – pun intended.

Tony Spilotro , 2020-03-11 18:00:58

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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