Last week, the cryptocurrencies market fell across the board fueled by news from South Korea and China.
On Monday, Reuters reported that Chinese authorities would start a crackdown on bitcoin mining. The news was significant because of the number of bitcoin miners in the country. These miners are attracted to the country by its cheap power and available technology making it the world’s largest mining country.
On Tuesday, reports emerged that South Korean authorities were about to start a crackdown on cryptocurrencies trading. Again, this was significant because South Korea owns most of the globally-renown cryptocurrencies exchanges. Also, more than 10% of ethereum is traded against the South Korean won.
As a result, bitcoin had four straight days of losses from Monday to Thursday before leveling off on Friday. Its price fell from $15,371 to $13,501 while ethereum ended the week higher by a few points. Ripple which fell to its lowest level in more than a week’s time recovered after Moneygram announced that it would explore using its technology on money transfer. This was a week after Western Union made similar news.
Last week also, the giant Swedish bank, Nordea announced that it would ban all of its employees from owning cryptocurrencies. Also, Microsoft and a large bitcoin conference announced they would stop accepting bitcoins.
Just as the week was dominated by news, including that of a new cryptocurrencies rapper, this week, we expect the same to happen. For example, on Tuesday, Thomas Jordan, the president of the Swiss National Bank will be speaking. In the past, Jordan has made some bullish remarks about bitcoin while cautioning against other smaller currencies.
In addition, this week, major US banks like Citi, Bank of America, and Bank of New York Mellon (BNY) will release their earnings. After the release, investors will get a chance to listen to the CEOs perspective on cryptocurrencies and their vision about the industry.
As you recall, last week, JP Morgan released its earnings where the CEO expressed regrets about his past criticism of the cryptocurrencies. A few months ago, he had dismissed the currencies as being a fad. Goldman Sachs also joined the cryptocurrencies bandwagon, claiming that investors should view bitcoin as a digital format of gold.
This week, cryptocurrencies traders will listen closely at what Michael Corbart of Citi, Charles Scharf of BNY, and Brian Moynihan of Bank of America.
Positive news will help cryptocurrencies recover from last week’s losses. On Ripple, the question on traders’ minds is on how its relationships with MoneyGram and Western Union will play out. Also, they will look out for other large money transfer companies that will want to partner with it. Such news could make the currency move above the $3.2 level.
Bitcoin is struggling to find direction. This is especially because of the negative headlines that have confronted the currency. This week, positive – or no news – could bring more interest to bitcoin. If this happens, we should be watching out for the $16,696 level.