May was an up and down month for the cryptocurrency markets. Prices of many of the most popular cryptocurrencies were on the upswing towards the end of April. Bitcoin prices were finally recovering into May, and then we saw prices start to trend down again here at the end of the month. What gives?
As you may have heard hundreds of times by now, the cryptocurrency markets are very volatile, and corrections like we’ve been experiencing the past couple weeks are normal. We’re still in that limbo period where we’re eagerly anticipating institutional investors to start investing in the crypto markets. And the crypto community is also crossing their fingers for more clarity with regard to regulation and legislation.
Coinmarketcap shows that the current market cap for the cryptocurrency markets is at $330 billion. Of that, Bitcoin’s dominance is at 38.8%, meaning BTC makes up just under 40% of the crypto market values. Now let’s take a look at how the top three coins performed over the past month and what trends might be taking place.
Bitcoin: Bitcoin started the month trending up, right around the $9,000 mark. During the first week of May, Bitcoin was as high as $9,800, and crypto enthusiasts were rooting for it to finally break through the $10,000 threshold once again. But instead, Bitcoin started heading the other way and we’re back to a price level of $7,400 as the month comes to a close.
Ethereum: The second largest cryptocurrency, Ethereum, has been volatile as well over the past few months, and entered the month trading at $675. Like Bitcoin, ETH rose with the markets at the beginning of the month, taking ETH tokens to $811, before correcting back to $560 here at the end of the month.
Ripple: Ripple experienced a very similar trading pattern to Bitcoin and Ethereum. Starting the month at $0.84, Ripple jumped higher to over $0.90, and has given up a third of its value throughout the month to finish at $0.61.
Domestic News
Wyoming Makes Waves with Its New Cryptocurrency Laws
Wyoming has created major buzz in the crypto community by passing sweeping legislation to define ‘utility tokens’ as a new asset class. The new laws create a business friendly environment for crypto-related companies, and they’ve experienced an influx of two or three new registrations each day. This new legislation comes at a tense and crucial time for the cryptocurrency markets as U.S. and international regulators are all taking a close review and expected to make decisions regarding regulation guidance going forward.
Arizona Residents Will Be Able to Pay Taxes with Cryptocurrency
Arizona governor signed SB 1091 into law, a tax bill allowing state residents to pay taxes with cryptocurrency. Under this new legislation, crypto payments would be converted by the state into US Dollars within 24 hours of receiving the funds. The bill doesn’t spell out a specific time frame for the incorporation of digital payments using cryptocurrencies, but represents the movement towards blockchain based payments.
Colorado Wants to Allow Politicians to Accept Cryptocurrency Donations
Colorado is working on regulations that allow politicians to accept donations for their political campaigns in Bitcoin and other cryptocurrency. Their proposed guidance reads:
“A committee may accept contributions in cryptocurrency, up to the acceptable limit for a cash or coin contribution. The amount of the contribution is the value of the cryptocurrency at the time of the contribution. The committee must report any gain or loss after the contribution as other income or receipts.”
The New York Stock Exchange Toys with the Idea of Cryptocurrency Trading
Institutional capital is looking to get in on the cryptocurrency markets. Intercontinental Exchange (ICE) is the parent company for the New York Stock Exchange (NYSE), and is working to allow large Bitcoin trades for investors and traders, and set up swap contracts with other financial institutions. This follows news in the prior month that NASDAQ is considering the idea of becoming a crypto exchange in the near future. And last week, Goldman Sachs opened up about their intentions to allow for trading based on the price of Bitcoin, like a futures contract.
Google is Trying to Poach Ethereum Founder for Their Crypto Project
Ethereum’s infamous founder and blockchain influencer Vitalik Buterin shared a recent job offer he received from Google (NASDAQ:GOOGL) to assist on a private blockchain project for the search engine giant. Of course, Buterin made a huge social media drama scene of the whole ordeal, posting the email he received from Google and asking the readers if he should abandon Ethereum for Google, which 59% disagreed and said he should remain dedicated to the Ethereum blockchain.
Global News
Argentinian Bank Leaves Swift in Favor of Blockchain Based Solutions
Argentinian bank Banco Masventas announced that they would drop out of the global financial messaging system SWIFT, and use Bitcoin’s protocol for settling international payments instead. They’ve developed a strategic partnership with cryptocurrency payment provider Bitex, who will handle the conversion of crypto to fiat. Many banks are considering blockchain solutions for setting international payments because the SWIFT messaging network can take between five business days to three weeks to process a payment.
Switzerland is Officially Considering a State Backed Cryptocurrency
The Swiss Government is coming around after their central bank formerly made statements about the instability of cryptocurrency.
“The Federal Council is aware of the major challenges, both legal and monetary, which would be accompanied by the use of an e-franc. It asks that the proposal be adopted to examine the risks and opportunities of an e-franc and to clarify the legal, economic and financial aspects of the e-franc.”
Venezuela is the other recent example of a country trying to implement cryptocurrency into their national monetary system. The South American nation recently launched the Petro, an oil backed cryptocurrency, which is aimed to circumvent United States sanctions on the struggling country.
India Contemplates New Tax Regulations for Cryptocurrency Trades
Rumors are that the Indian Government is considering a goods and services tax of 18% for cryptocurrency trades, as they are considered a supply of goods. Any transaction involving a party outside of India’s jurisdiction would be considered an import or export of goods and subject to the same tax regulations. No decisions have been finalized, but the new tax law could be determined by July 1.
Money is Leaving Iran to Purchase Cryptocurrencies
Iran’s Chairman of Economic Commission revealed that $2.5 billion has left the country to buy cryptocurrencies. This comes after the country’s central bank banned banks and financial institutions from dealing with virtual currencies due to money laundering and anti-terrorism concerns. Iran has also been experimenting with a national cryptocurrency, with similar intent to Venezuela to avoid economic sanctions.
China Finds over 400 Fake Cryptocurrencies
An organization backed by the Chinese government issues a report on 421 fake cryptocurrencies they discovered through their monitoring platform. One common red flag with these fake cryptos is a pyramid based model with claims of high returns. Others don’t even have code or a working blockchain, or aren’t traded on actual crypto exchanges. These are major things to consider in a market flooded with Initial Coin Offerings and heavily marketed pump and dump schemes.