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Crypto Winter No Longer Has Big Impact on Long-Term Industry Growth, EY Executive Says

Crypto Winter No Longer Has Big Impact on Long-Term Industry Growth, EY Executive SaysEY’s global blockchain leader says that for the first time ever, crypto’s price swings do not have that big of an impact on the long-term growth of the industry. Nonetheless, he stressed: “It is also important that regulators crack down on obvious Ponzi schemes faster and with more severity.” EY’s Brody on Crypto Winter Paul […]

Crypto Winter No Longer Has Big Impact on Long-Term Industry Growth, EY Executive Says

EY’s global blockchain leader says that for the first time ever, crypto’s price swings do not have that big of an impact on the long-term growth of the industry. Nonetheless, he stressed: “It is also important that regulators crack down on obvious Ponzi schemes faster and with more severity.”

EY’s Brody on Crypto Winter

Paul Brody, global blockchain leader at EY, discussed the crypto winter, the need for regulation, and the collapse of crypto exchange FTX in an interview published by the Mint publication Thursday.

He was asked whether he expects the current crypto winter to be over soon. “This is a much milder crypto winter than the last one,” he replied. “One of the major features of this winter is that there is a decoupling going on between the price of crypto assets and product and engineering development work that is going on in the crypto industry.” The EY executive opined:

For the first time ever, price ups and downs don’t have that big of an impact on the long-term growth of the industry. We are slowly moving away from the pure financial focus of the industry.

He added that the Ethereum ecosystem is now much more focused on application development, non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs).

Brody on FTX Collapse and the Need for Crypto Regulation

The EY executive also discussed the collapse of crypto exchange FTX, which some have compared to Ponzi schemes, including the infamous one run by Bernie Madoff.

Responding to a question about whether users can trust crypto exchanges following the FTX meltdown, he cautioned: “The idea behind crypto was that it is fully transparent since it is on the blockchain and you can see if something bad happened. That was a flawed theory. Seeing data doesn’t mean you can understand the complex data flow in smart contracts.”

“Entities that have tried to blend on-chain and off-chain financial transactions without robust regulatory oversight are the ones that are not doing well,” Brody continued.

“It’s been impossible to know if your assets are strictly being held and used for you, or if they are being pledged and used in other scenarios,” the EY blockchain leader warned. “The key takeaway is that your governance has to be either simple enough for people to follow or you can take a rigorously audited and publicly traded approach.”

He also emphasized the need for stricter regulation, stating:

It is also important that regulators crack down on obvious Ponzi schemes faster and with more severity. I would like to see more regulatory activity and rules that good players can follow.

Following the meltdown of FTX, many people have called on regulators in various jurisdictions to tighten their oversight. Bank of England Deputy Governor for Financial Stability Sir Jon Cunliffe stressed this week that the FTX collapse has highlighted the urgent need for tighter regulation. The White House and several U.S. senators have called for proper crypto oversight. A U.S. lawmaker recently urged the Securities and Exchange Commission (SEC) to take decisive action to regulate the crypto industry.

What do you think about the comments by EY’s executive? Let us know in the comments section below.

Source: Markets and Prices Archives – Bitcoin News

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Crypto stocks poised as Bitcoin holds $23K ahead of FOMC

Bitcoin miners Core Scientific rose 33% as stocks of Bitfarms, Stronghold Digital, CleanSpark all ended the past week higher. Coinbase and Robinhood shares also rose as Bitcoin broke above $23,000. FOMC meeting is this week and the market reaction will be key to what next for Bitcoin and crypto stocks. A number of crypto-related stocks […]

The post Crypto stocks poised as Bitcoin holds $23K ahead of FOMC appeared first on CoinJournal.

  • Bitcoin miners Core Scientific rose 33% as stocks of Bitfarms, Stronghold Digital, CleanSpark all ended the past week higher.
  • Coinbase and Robinhood shares also rose as Bitcoin broke above $23,000.
  • FOMC meeting is this week and the market reaction will be key to what next for Bitcoin and crypto stocks.

A number of crypto-related stocks are looking to extend gains notched in the past few days after closing in positive territory on Friday.

Among those to rip are share prices of crypto mining firms that had been struggling badly after reaching new all-time lows amid the crypto winter. 

This is happening even as Bitcoin price looks to push higher after holding above the $23,000 level over the weekend. A crucial macro news event to watch out for is the FOMC meeting this week.

Surge in Bitcoin price helped crypto stocks

Core Scientific (CORZ), the world’s largest publicly-traded Bitcoin miner, surged an impressive 33% on Friday, while crypto mining firm Digihost Technology (DGHI) saw its shares jump more than 11%.

Stocks of NASDAQ-listed miners Bitfarms (BITF), Stronghold Digital Mining (SDIG), Bit Digital (BTBT) and CleanSpark (CLSK) all ended the week in the green. Elsewhere, NYSE-listed Bit Mining and SOS ADR also rose.

Coinbase (COIN) and Robinhood (HOOD) stocks also traded higher, with the US-based crypto exchange’s stock soaring more than 15% on Friday. Coinbase‘s stock is up more than 73% in the past 30 days before markets open on Monday, 30 January. Robinhood shares ended the week 8% higher and were up nearly 28% over the past 30 days.

Bitcoin price, FOMC – what next for crypto stocks?

As noted, most of these publicly listed crypto companies saw their share prices soar alongside the positive price action of Bitcoin. But crypto has also largely correlated with stocks, with this week crucial in terms of the Federal Open Markets Committee (FOMC) meeting. 

On the positive side of things…

BTC/USD reached highs of $23,955 last week and is up more than 40% year-to-date. According to recent data from crypto analytics platform Glassnode, BTC’s recent upside momentum has the flagship digital asset’s price above three key on-chain metrics.

The breakout above $22,800 had Bitcoin above both the long term and short term cost-basis as well as Realized Price – the first time this has happened since 2020 COVID-19 induced crash. Also, the previous time when prevailing BTC price was above the three metrics was during the 2018/19 bear market.

On the flipside…

As covered by CoinJournal, Glassnode suggested last week that bulls managing to hold above the $22.4k level would aid sentiment and potential further gains. However, this week could see recent momentum derailed if investor reaction to the Federal Reserve’s FOMC minutes turns out to be negative. 

Although the market already expects a 25 basis point rate hike, some experts believe it would be a disaster for the markets if the Fed goes for a 50 basis point hike instead.

According to CoinGecko, Bitcoin was trading 1.1% down at 7:15 am ET on Monday as FOMC-related volatility likely began to set in across markets.

The post Crypto stocks poised as Bitcoin holds $23K ahead of FOMC appeared first on CoinJournal.

Source: CoinJournal: Latest Bitcoin, Ethereum & Crypto News

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