The fast-evolving crypto market is presently facing a significant amount of selling pressure amid reports coming from Amundi, Europe’s largest asset manager, due to the impact regulations could have on cryptos.
At press time, the global crypto market plunged by 2.20% with a market value currently pegged at $1.64 trillion.
The crypto market has shed much of its stellar gains earlier recorded as significant selling pressure from crypto investors pushed the value of cryptos lower across the market spectrum amid profit-taking.
For the day, about 256,032 crypto traders were liquidated. The largest single liquidation order happened on Binance-DOT value of $35.59 million.
In the report, Amundi’s deputy CIO, Vincent Mortier and head of global views, Didier Borowski said that G7 regulators were “determined” to regulate cryptocurrencies. Such regulation will likely “initially lead to an adjustment of their price, possibly brutal.”
Consequently, credible reports also reveal that the Bank of Boston and Massachusetts Institute of Technology are jointly working on delivering a Central Bank Digital Currency prototype before the end of July.
Such digital assets could fundamentally change US citizens’ use of capital, leading some financial brands to lobby the Fed and Congress to pause its creation.
“Everyone is afraid that you could disrupt all the incumbent players with a whole new form of payment,” said Michael Del Grosso an analyst for Compass Point Research & Trading LLC.
That being said, the report stated that once the regulatory environment is sorted out and the main risks addressed, the crypto market might bounce stronger.
“Only once the regulatory environment has stabilized, and the relationship with CB [central bank] digital currencies has been clarified, will asset managers be able to recommend digital assets as safe investment vehicles.
“At the end of the day, investments in CCs [cryptocurrencies] may be promising, but they are still speculative in nature,” they concluded.
Ripple’s CTO advises investors to reduce their crypto investments
The crypto leader recently made the warning on Twitter.
David Schwartz, Ripple’s Chief Technology Officer has advised investors and crypto traders to consider offloading some amounts of their crypto holdings to reduce risk. The crypto leader recently made the warning on Twitter.
“This is probably going to be my least popular tweet ever, but: If you have life-changing amounts of cryptocurrency, please take some time to seriously consider selling some to reduce your risk and exposure. This is not any kind of prediction about what the market will do,” his tweet stated.
This is probably going to be my least popular tweet ever, but: If you have life-changing amounts of cryptocurrency, please take some time to seriously consider selling some to reduce your risk and exposure. This is not any kind of prediction about what the market will do.
— 𝘋𝘢𝘷𝘪𝘥 "𝘑𝘰𝘦𝘭𝘒𝘢𝘵𝘻" 𝘚𝘤𝘩𝘸𝘢𝘳𝘵𝘻 (@JoelKatz) April 13, 2021
To lend credence to his advice, about $1.39 billion dollars were liquidated in the crypto market arbitrarily with about 240,759 traders liquidated.
The largest single liquidation order happened on Huobi-XRP valued at $11.69 million.
Despite the recent pullback in some trending crypto assets, some crypto traders remain upbeat that crypto assets are the best tools for hedging against rising inflation, offer better returns than many traditional assets, and are set to win more attention from the corporate world.
Many weeks ago, the Financial Conduct Authority, a leading United Kingdom financial regulator, issued a piece of stern advice on the risk associated with trading crypto assets.
The statement highlighted the risks associated with investing in Bitcoin and other crypto-assets and warned the public that there were high chances that all their funds could be lost.
“The FCA is aware that some firms are offering investments in crypto assets or lending or investments linked to crypto assets, that promise high returns.
Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money,” said the FCA.
Coinbase success: Rapper Nas among early investors, set to make over $100 million
Nasir Jones is amongst the earliest investors in Coinbase via his Queensbridge Venture.
The trending news in the cryptoverse is the successful direct listing of Coinbase on the NASDAQ, which happened on Wednesday, 14th April 2021. So far, the returns are looking very good for early investors in the crypto trading company.
According to CNBC, Coinbase closed its first day in NASDAQ at a value of $328.28 per share and a valuation of $85.8 billion. During the course of the day, Coinbase valuation exceeded $100bn but later dropped to $85.8bn.
Rapper Nas and QueensBridge Venture Partners
Legendary rapper, Nasir Jones who owns and runs Queensbridge Venture Partners together with its Co-Founder Anthony Saleh were amongst the earliest investors in Coinbase.
QueensBridge Venture Partners invested in Coinbase as early as 2013 in a Series B round back when it raised $25 million. Around that time, Coinbase was valued at about $143 million. According to QueensBridge Co-Founder, the venture capital firm made an investment of $100,000 to $500,000.
According to Coindesk, at the time of Nas’ investment, a single unit of Coinbase share sold for $1.00676. With an investment of $100,000 to $500,000 QueensBridge stands to own 99,329 to 496,642 unit shares.
With Coinbase trading at an average price of $350 yesterday, Nas and his VC firm stand to earn between $34.76 million and $173.8 million ROI, according to Coindesk. The number can be a lot higher given that this is just Coinbase’s first day on NASDAQ and some experts expect its price to increase.
Nas celebrated his smart investment with a tweet eulogizing cryptocurrency. His VC firm also invested in Robinhood and Dropbox.
What you should know
- Coinbase was listed directly. This is quite different from an initial public offering (IPO). According to Investopedia the difference between an IPO and a direct listing process is the presence and absence of new shares.
- In an IPO, the company involved creates new shares and employs underwriters before going public.
- In a direct listing only existing or outstanding shares are made public. Companies that pursue this strategy usually don’t employ underwriters.
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