A few days ago, a major announcement was made by the Ethereum team. This was the start of a new transition for the platform
By: Alice Peter
Is the Worst Over For Bitcoin and the Rest of Crypto?
The crypto market has been on the rise for the last few years, but has the worst of the bubble finally ended? Whether you believe in cryptocurrencies or not, the sentiment of many investors has been shaken after the collapse of FTX. With many experts believing that there’s only room for a small number of large digital assets to gain traction, it’s hard to know where to turn next. Fortunately, there are some signs that the market may be ready for a rebound.
Ethereum’s price has the potential to climb tremendously for the remainder of 2022
A few days ago, a major announcement was made by the Ethereum team. This was the start of a new transition for the platform. The Merge was going to change the network from a Proof-of-Work (PoW) to Proof-of-Stake (PoS) system. It was a move designed to reduce energy consumption. However, the transition hasn’t been able to address network’s expensive gas fees.
In the weeks following the Merge, the ETH price dropped significantly. Many traders predict more negative movement in the coming weeks.
Despite this, ETH is still considered to be the best long-term investment. Its price is expected to rise gradually before the end of 2022.
But, it’s important to remember that ETH is highly volatile and can be hard to predict. If you’re unsure whether or not to invest in ETH, do your research and consult a financial advisor.
A number of crypto experts believe that ETH is underpriced. One of these is Arthur Hayes, former CEO of BitMEX. He says that ETH will trade at around $850 by the end of 2022.
Investor sentiment has been shattered by FTX collapse
The recent collapse of FTX, a major crypto exchange, is having a huge impact on the entire digital asset industry. As FTX’s customers began requesting their money back, other exchanges have begun to halt customer withdrawals.
FTX was once the world’s largest cryptocurrency exchange. But its rapid fall from grace left investors wondering just how safe the crypto industry had become.
FTX’s fall came as a result of a number of financial missteps. Customers found that the company was tapping into their accounts to fund risky bets. Similarly, hackers may have stolen several hundred million dollars from customers’ accounts.
One of the biggest reasons FTX collapsed was the shortfall of assets in the exchange’s balance sheet. This led the exchange to file for bankruptcy. When it did so, it announced that it would conduct the bankruptcy process in a transparent manner.
Sam Bankman-Fried, the founder of FTX, resigned as the company’s CEO. He was arrested in the Bahamas last week and has been charged with fraud. His lawyer has not responded to CNN Business’ request for comment.
Regulations in the United States have understood crypto’s risks
The United States has become a global leader in defining and applying anti-money laundering and counter-financing of terrorism (AML/CFT) standards in the digital asset ecosystem. Although the sector has grown rapidly over the past few years, the regulatory infrastructure for this industry is still a work in progress.
Aside from traditional risks, there are several unique risks associated with crypto-based products and services. These include security, operational, and fraud risks. Banks will likely continue to tread carefully until a comprehensive regulatory framework is in place.
Several federal regulatory agencies have begun to collaborate on a framework for the crypto asset class. For example, the Federal Trade Commission (FTC) has issued guidance and has developed in-house expertise, while the Securities and Exchange Commission (SEC) has created FinHub, an online platform to help consumers understand risks.
The United States is also working closely with other countries and partners to develop a robust policy framework for crypto-based innovation and development. For instance, the European Union has a digital assets regulation in the works and is expected to implement it in 2024.
Security breaches could undermine public trust in blockchain-based payment systems
The Security and Exchange Commission (SEC) announced in September 2017 that hackers may have obtained inside information on the Edgar database, which contains market sensitive filings on U.S. stock exchanges. This data could have been used for illegal profits on share trades.
In October, the Far Eastern International Bank (FEIB) was hit with a $14 million cyberattack. The attack involved malware, which accessed a SWIFT terminal and was used to make fraudulent transfers. A spearphishing email provided attackers with access to the bank’s back-end database and 90 Anthem systems.
Using a cryptographic proof to validate digital data, blockchain technology enhances the system’s security. It also improves the speed of data transmission, which increases trust in a supply chain. Blockchain’s ability to provide a nearly real-time database bolsters the trust of both consumers and the organization. Moreover, it provides more authentic information, which will increase trustee knowledge.
While blockchain is expected to strengthen the institution-based trust, it can also boost cognition-based trust. In particular, this type of trust will be a result of blockchain’s superior security systems, which enhance information transparency and provide credible and reliable information. As a result, the credibility of SMEs will be improved.