Bitcoin Death Cross - Investopedia
|
I have never really understood cryptocurrency. It seems fake and built on nothing tangible. That being said, most other currencies were built on shiny metals which seemed to hold little tangible value other than for jewelry and utensils in days of yore. They had value because we coveted them over other metals and stones by a wide margin. In a sense this valuation was fake as well. The difference between cryptocurrencies and gold backed currencies, when currencies were indeed backed by gold, was you could touch and feel the gold. Now, we just value the paper and the numbers printed on them. As for cryptocurrencies, we jumped right to valuing the numbers displayed on computer screens.
No matter what I believe I don’t understand about cryptocurrencies, people have been trading them for fifteen years. I have yet to trade in that market. If, in the “woulda shoulda coulda” world of missed investment opportunities, I had bought $542.20 worth of Bitcoin on my 60th birthday in 2013, I would have 5.54 Bitcoin that would be worth $500,018.55 today. How do I know this? There are several Bitcoin calculators available online. I chose What if I Bought Bitcoin Calculator – By Date (FOMO). I guess I am not alone the in fantasizing about how much I might have profited if I had bought some Bitcoin back then. But I didn’t because it seemed fake. What do I know?
Bitcoin and other cryptocurrencies have been in the news lately because the market has dropped and dropped significantly. Per ABC News:
The election of Trump, who dubbed himself the “first crypto president,” set off a surge in the price of digital assets.
Bitcoin climbed 40% in a matter of weeks, surpassing $100,000 for the first time last December. After a dip in the spring, bitcoin rallied to a record high of about $126,270 on Oct. 6.
In recent weeks, the price of bitcoin has dropped nearly $40,000 or by about one-third. Still, the price remains more than 25% higher than where it opened trading on Election Day last November.
In mid-November, Bitcoin made a death cross. It’s 50 day moving average of prices crossed below its 200 day moving average. A death cross is a major downward (signal) in a market.
In the same ABC News story, they interviewed Hillary Allen a Professor of Law specializing in cryptocurrency policy at American University. She noted, “We’ve seen plenty of crypto crashes before. With something like crypto, the air comes out every now and then.” The new story summarized her assessment of the volatility as being due to “an absence of fundamental value that would otherwise anchor the price.” Was she speaking about cryptocurrencies not being rooted in something like… um… I don’t know… a shiny metal?
The truth is that cryptocurrencies are moving toward more regulated markets through several key developments around the globe:
- Comprehensive Regulatory Frameworks: Jurisdictions are implementing dedicated legislation, shifting from a fragmented "regulation by enforcement" approach to clear, unified rules. The European Union's Markets in Crypto-Assets (MiCA) Regulation is a prime example, providing a uniform licensing and operational framework for crypto service providers and stablecoin issuers across all member states.
- Enhanced Financial Crime Controls: Governments worldwide are enforcing stricter Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols for crypto exchanges and businesses. Many are implementing the Financial Action Task Force's (FATF) "Travel Rule," which requires Virtual Asset Service Providers (VASPs) to share customer information during transactions, bringing crypto in line with traditional finance standards.
- Integration with Traditional Finance (TradFi): The approval of regulated investment products, such as Bitcoin Exchange-Traded Funds (ETFs), signals a major step in bringing crypto assets into the traditional financial system. This provides a clear, regulated channel for institutional and retail investors to gain exposure.
- Stablecoin Scrutiny: Regulators are intensely focused on stablecoins, seeking to mandate that issuers maintain adequate reserves and ensure transparency to safeguard financial stability.
These trends, driven by the industry's growth and international cooperation, aim to balance innovation with critical goals like investor protection, financial stability, and the prevention of illicit activities.
I do believe this move to more regulation is a good thing.











