The markets have seen a lot of action today as multiple negative news stories breaks about cryptocurrencies, and mainly Bitcoin.
The first news to break was not really news. A major news outlet known for their sensationalistic journalism summarised a 3 week old bill introduced by the US Senate by stating that “Bitcoin/Crypto is evil”. They present it as if the US was taking measures and cracking down on the cryptocurrency market.
This is nowhere near the truth. The bill aims to treat cryptocurrencies the same as other currencies for US travelers. Travelers entering or exiting the US are required to declare their cash if they carry more than 10 000$ today. The US is simply treating cryptocurrencies the same, which should be seen as a recognition of its validity, not a doomsday prophecy. For anyone who wish to read the bill, you can find it here.
The second news story to break today is regarding the future of Bitcoin. Jihan Wu, the owner of Bitmain, which is the largest bitcoin mining hardware manufacturer, said that they will support a hard-fork of the Bitcoin blockchain in August.
There has been a lot of internal conflicts regarding Bitcoins future, as the current form has had trouble scaling. As volume has increased, transaction times and fees have risen. There are multiple suggestions as to how this will be solved, and the community is split in which direction to move. This is a cause of concern for bitcoin, which in turn will affect most other cryptocurrencies as well.
It is unclear wether this is a real commitment or market manipulation from Jihan Wu, either way it proves Bitcoin is not truly decentralized today.
Bitcoin is still crucial to the cryptocurrency economy because almost all trade goes through Bitcoin. It is difficult to buy other cryptocurrencies for FIAT ($, €, £ etc) and thus Bitcoin is required as a middle man. This is why all cryptocurrency prices are still very connected to Bitcoin, and will rise and fall with it.
Not invested? Start by finding the best exchange!