This month, the UK’s FCA released its Cryptocurrency report with important findings and conclusions derived from statistics based on data of the previous years.
They made a start by identifying crypto assets belonging to a complex nature, and stated that misinformation on the subject is something that must be corrected for the best interest of market participants.
One of the points the report included was called harm to consumers, with no more need to explain the information consisting the report.
New Risks of Crypto market?
Of course, digital Currencies expose users to significant risks.
However, the majority of investors who purchased assets, did not fully understand or they have been misled, as to what drives the value of the coins.
In depth information on the subject is not the easiest for the average person to fully understand and so most of the investments are made on pure speculation, which is extremely dangerous.
Investors are simply following the trend, making decisions other people made because they heard they have an opportunity to make a profit.
Very precisely and with evidence, most people were not aware that the crypto market was not ready for the huge amounts invested (Billions of USD) as the industry was built on weak infrastructure and poor services, which led to massive losses and theft.
On the other hand, users may have overestimated their ability to understand the tokens and so were caught up too confident, which led to the same results the uninformed users had.
UK FCA regulation on Crypto market
Moreover, the FCA warned about investors participating in speculative trading activities regarding crypto assets, stating they could suffer huge sudden losses.
More specifically, they advised caution on leveraged instruments, with most of the risk of loss related to the volatility of crypto assets.
Adding to that, the association indicated a significant part of consumers were financially hurt by poor advertising schemes, indirectly stating this part of the market also needs to be restructured, for market reliability purposes.
Statistics of ICO investment
An interesting statistic that could help us make some conclusions was the reduction in fund raising from ICO events.
In a comparison between 2017 and 2018, there was a reduction surpassing 90% in the money invested in Initial Coin Offerings.
From a total of 823M USD invested in 2017 the number dropped to 65M USD, in late 2018.
The FCA sited the increased amount of fraudulent events taking place as having scared off Investors, or in a more skeptical form has made them more cautious.
However, how could so many illegal events been allowed to take place? And who authorized them for mainstream use?
We base our report upon findings of the FCA because we believe their views are bundled together in the correct manner that will raise self-criticism for the industry.
At the moment, the value of cryptocurrencies remains under huge disbelief, suggesting investors have lost all faith in the innovative tokens and the way they are offered.
This week, Bank of England Governor Mark
Carney referred to cryptocurrencies as crypto assets as in his opinion they have more similarities to assets than currencies.
Should we make a complete distinction between the assets and currencies, since investors don’t seem to be willing to change the preference for other instruments like Gold or the USD?
Technical outlook – BTCUSD
In the previous days, BTCUSD moved in a sideways movement between the 3614.52 (R3) resistance level and the 3546.43 (S3) support level.
In a bullish momentum BTCUSD could surpass the 3590.34 (R1) resistance level and aim higher with the 3604.24 (R2) and the 3614.52 (R3) resistance levels being next.
In the opposite direction, with a selling momentum, BTCUSD could be sent below the 3570.91 (S1) support level.
If the selling persists we may see BTCUSD moving even lower for the 3559.05 (S2) support level, with the 3546.43 (S3) support barrier being next.