China Says No to ICO
Wall of Worry is a term more generally used in stock markets to indicate that there is significant uncertainty around the sustainability of a market uptrend
Global equity markets have generally performed strongly since the Global Financial Crisis on a look-back basis
However, there were persistent reasons to be bearish throughout the markets solid climb upwards
Similarly, there was a lot of dancing on the graves of cryptocurrencies this week in response to a joint statement by seven Chinese financial regulators that the ICO mechanism is illegal under domestic law
Price action was understandably volatile for the key cryptocurrencies with Ether being a particular victim
However, prices appear to have stabilized and initial concerns are being digested constructively by the market
CFTC Support for Cryptocurrencies
A piece of news that should not go unnoticed in the fascinating world of cryptocurrencies is that published on July 24th when the CFTC granted permission to LedgerX to clear and settle derivative contracts for digital currencies
The license authorizes LedgerX to provide clearing services for fully collateralized digital currency swaps which complements its existing license to operate as a swap execution facility which was granted earlier in July
Do not underestimate the groundswell of institutional support for infrastructure which permits institutional capital to move into the cryptocurrency complex
The potential of introducing leverage into the cryptocurrency market which has traditionally been dominated by unleveraged investors could have major implications for price action
One recent analogue for such an impact was February 9, 2015 when China launched the first publicly traded stock options exchange in Shanghai - the market doubled in a very short period of time
