Cryptocurrency markets are holding their breath
Trade volume slackens as regulatory uncertainty puts crypto markets in a holding pattern.
The trade volume for both bitcoin and Ethereum has slacked off considerably since around 7 February, according to CoinMarketCap, with many other coins showing a slowdown of trade volume since then. It's almost like the cyptocurrency markets are holding their breath, most likely in the face of the currently uncertain regulatory environment around cryptocurrencies.
"There is significant Fear, Uncertainty, and Doubt still around recent China and South Korea regulatory action," said Chris Keshian of Apex Token Fund to Forbes.
Others look at the recent crypto market crash, and the environment of caution that it may have fuelled.
"They are recovering after what was a torrid set of news and pinned between future regulatory scenarios," said Charles Hayter, co-founder of CryptoCompare to Forbes.
Despite the relative lack of trade volume at the moment, cryptocurrencies still remain volatile compared to many other asset types, which could be fuelling a separate cycle of rises and falls. This might also be keeping away the speculators who don't want to dip their toes into day trading.
Although the market isn't in the freefall of early February, the once-elusive signs of recovery are still elusive. The first hard bounceback after the crash was quickly reigned in by speculators cashing in their gains, and without clarity around the world's regulatory environment, it might continue to be like this.
Fortunately, clarity is coming. Regulators around the world are gradually crystalising around the issues of cryptocurrency, with some competing opinions. But a concrete global crackdown on cryptocurrencies is looking extremely unlikely, and the general consensus among regulators and analysts alike is that the digital coins are here to stay.
Regulatory clarity seems likely to bring money back to the deflating markets. It's not clear when it will come, or exactly how much clarity the crowd needs, but it's definitely on the move.
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Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, NANO, SALT