For better or worse, the general public has seen the light and begun to adopt digital assets en masse. While this is no doubt a positive sign overall, it has brought forth various new issues. Beyond a never-ending lineup of exchanges suffering from hacks due to shoddy security practices, thieves have begun to target low lying fruit – retail investors just ‘testing the waters’.
This targeting has recently been highlighted in Canada by the Canadian Anti-Fraud Centre (CAFC). In a recent conversation with CTV News, the CAFC listed the top scams perpetrated throughout 2021. Coming in at #1 and responsible for the theft of over $70 million CAD? Cryptocurrency investment scams. While we won’t go in to the details behind how these scams work, the take home message is that digital assets are here to stay, and their popularity is growing every day – meaning these scams are here to stay as well.
Unfortunately, whenever there is money to be made, there will always be bad actors looking to take advantage of the unsuspecting – which is exactly what is happening. The old adage, ‘with great power comes great responsibility’ rings true here, applying quite well to digital assets. By shifting financial power back to the investor, asset holders are now burdened with increased responsibility. Many do not realize this however, and fail to act accordingly. In a perfect world, this would mean using cold wallets, keeping holdings private, doing proper due diligence when investing, etc. – steps clearly not being taken by many.
As a result of this increased popularity and resulting scams, regulators have their work cut out for them. In an effort to protect investors, they are working hard to not only reign in the scams and fraud, but to create clear frameworks which ensure a fair marketplace for all involved. This past week saw multiple examples of this, with varying approaches.
Although some countries are considering banning such assets all together, most are moving in the right direction.
- El Salvadorian President Nayib Bukele spoke on the demise of FIAT and rise of digital assets as a revolution in a recent tweet.
- Paraguay just passed a Bill which regulates crypto mining and trading, giving clarity to market participants.
- Senator Lummis spoke with Bloomberg on an upcoming potential Bill which would provide classification clarity in the United States.
It is perhaps due to such steps forward and commentary that Bitcoin was able to recover from recent losses this past week, heading in to Christmas weekend on quite a positive note.
Market Reaction & Metrics
As stated, this past week saw Bitcoin and the broader digital asset market recover slightly from weeks of losses. At time of writing early week lows of roughly $45,000 turned in to an encouraging breach of the $51,000 marker.
From a strength and stability standpoint, the Bitcoin network is nearly as robust as ever. While not quite at all-time-highs, hash rate is once again trending upwards as miners continue coming back online after relocating operations due to the exodus from China months ago.
Although market sentiment is not back to where it was in mid-November, Bitcoins ‘Fear and Greed’ index did experience a positive upswing this week alongside the top digital asset’s modest price recovery.