Cryptocurrency Latest: Celebrity endorsements, Shariah and a peaked trader interest
Celebrities are being warned against endorsing cryptocurrencies as the Bitcoin market manages to stay above the $7,100 mark. The Tradefair team brings you the latest news in cryptocurrency...
"The majority of people no longer see cryptocurrencies as a way to earn a quick buck anymore. People are now starting to invest because they can see the value in the long run."
- Siim Õunap, FX and crypto trader.
Cryptocurrency shows no signs of going away anytime soon, in fact the market is still catching the eye of many investors, but is the post-craze slump over or is there more uncertainty to come? We bring you all the latest in the world of Bitcoin and digital currencies.
Celebs warned against endorsements
As people still come to terms with the financial and legal implications of trading in digital currencies, celebrities are being warned against jumping into deals to endorse them. The Financial Times reports that high-profile stars like boxing champion Floyd Mayweather are being drawn into potentially fraudulent schemes.
It comes after a case in the US highlighted the involvement of famous promoters in the collapse of an initial coin offering (ICO). This led to the Securities and Exchange Commission (SEC) charging two men last week with taking $32 million from thousands of investors via an ICO, which is typically used to crowdfund money for digital currencies.
While the SEC didn't name Mayweather in their statement, it did highlight their involvement, and experts have warned that the retired boxer and other people who have endorsed ICOs could now face legal action from regulators.
Bitcoin hints at stability teetering above $7,000
For investors that have been sceptical about Bitcoin's ability to achieve any level of stability, news that it is now hovering above $7,000 may come with great interest but it's still a far-cry away from the near $20,000 mark it reached last year. March saw it drop to under $10,000 for the first time, falling to a dismal $6,800 at one point before it steadily recovered to above $7,100.
Some experts are assigning the sudden hit to Google's announcement that it would ban cryptocurrency advertising from its pages later this year as it believes they are "deceptive content".
However it appears that many investors are attracted to the thrill of Bitcoin's volatility, with the cryptocurrency market as a whole catching the eye of traders, with many alternative currencies making advances.
Siim Õunap, an FX and crypto trader, told Forbes: "The majority of people no longer see cryptocurrencies as a way to earn a quick buck anymore. People are now starting to invest because they can see the value in the long run."
Could Shariah compliance hold new potential for digital currency trading?
A new version of cryptocurrencies are gaining acceptance from Muslims, for whom speculative trading it forbidden by Shariah law. The could see wealthy nations like the United Arab Emirates (UAE) take a new interest in the potential of digital currency trading.
Reuters reports that new gold-backed cryptocurrencies will reduce the speculation associated with cryptocurrencies and could allow many Islamic investors to balance their beliefs with trading.
A Dubai-based start-up company founded last year - called OneGram - is at the forefront of this initiative. Each OneGram cryptocurrency unit is backed by at least a gram of physical gold stored in a vault.
"Gold was among the first forms of money in Islamic societies so this is appropriate," said Co-founder Ibrahim Mohammed. "We are trying to prove rules and regulations from Shariah are fully compatible with digital blockchain technology."