As the craze for Bitcoin starts to die down, Litecoin and Ethereum are on the rise. The Tradefair team brings you the latest in cryptocurrency...
"I’m not sure all of the rules would translate over, but there are certainly principles that exist in that space that we have to then apply in some respect to what’s happening with crypto-asset trading."
- Brett Redfearn, Director of Trading and Markets at SEC.
Most people think of Bitcoin and cryptocurrency as being interchangeable terms, but there are a vast number of digital currencies out there. The market is now starting to see an emergence of these lesser-known cryptocurrencies as the craze for Bitcoin dies down.
So what's been happening in the world of digital currencies?
The rise of Ethereum and Litecoin
Forbes revealed that, while Bitcoin remains the most well-known, other cryptocurrencies are rapidly growing in popularity, especially among younger traders. According to a survey, 9.19% of millennials (18-34) would choose to invest in cryptocurrencies over anything else if they were given $10,000. More than three-quarters (76%) said this would be in Bitcoin, while 12% would invest in Ethereum and the same figure in Litecoin.
Although none of this is particularly shocking, what may surprise traders is that there's no sign of Ripple in the survey findings. Currently third in market capitalization, many would have expected the digital currency to be among the most popular, but evidently it's not.
US regulators call for "stock market-like" trading
Regulators are concerned that cryptocurrency markets still lack the proper standards that the stock market has, according to a report by VentureBeat. Director at the US Securities and Exchange Commission's (SEC) Division of Trading and Markets Brett Redfearn compared the current situation to the "Wild West".
He said: "I'm not sure all of the rules would translate over, but there are certainly principles that exist in that space that we have to then apply in some respect to what's happening with crypto-asset trading."
Many experts believe that greater regulation around cryptocurrency and ICO markets will bring more widespread interest, allowing traders to invest more heavily and offsetting some of the risk associated with it currently.
Time for a new Saga?
The Financial Times reports that economists are driving a new kind of cryptocurrency that is created with the stability that Bitcoin is now desperately trying to possess. Nobel Prize-winning economist Myron Scholes, Jacob Frenkel, Chairman of JPMorgan Chase International and former Governor of the Bank of Israel, and Dan Galai, co-creator of the Vix volatility index are all helping to devise the new token called Saga.
It will hope to avoid many of the pitfalls that Bitcoin has fallen into and, as such, avoid the unpredictable swings of price. Saga will do this by using commercial bank deposits as a benchmark, allowing asset holders to claim their money back by cashing in the cryptocurrency. It will also require anti-money laundering checks and ID checks before purchasing.
"While blockchain technologies have gained growing acceptance, encryptic currencies have raised public policy concerns, since they are anonymous, unbacked and are highly volatile," Frenkel told FT. "I share these concerns and see great value in Saga's vision to address them properly."