Cryptocurrency news:
Since Bitcoin’s creation in 2009, it’s been the subject of wild swings in value. Investors have flocked to it, lauding it as the future of money, while others worry it’s a speculative bubble that’s set to burst.
The currency is based on advanced coding that’s used to verify transactions and create a public record known as the blockchain. Unlike traditional currencies like dollars and euros, it’s decentralized and not owned by any central authority.
The oldest cryptocurrency, Bitcoin, experiences a “negativity effect,” which means that negative information has a bigger impact on returns and volatility than positive news. Younger cryptocurrencies, however, experience an inverted asymmetric volatility pattern.
Investors are getting more comfortable with the volatile asset, with spot bitcoin ETFs opening the market to millions of new investors. A soft US dollar and the Trump administration’s digital currency friendliness also boosted prices. And the Senate passed legislation to regulate stablecoins, a form of the cryptocurrency that’s linked to a specific fiat currency like the euro or dollar.
The new regulations could make the industry more mainstream. But a lot of work remains. For example, stablecoins need to prove that they’re truly stable and not vulnerable to sudden reversals in value. And it’s not clear whether they’ll be considered securities, which are traded on public markets. Generally, securities are defined as anything that represents a value and can be sold to others for profit. Stocks and bonds, for instance, are securities because they represent ownership of a public company or debt owed to the bondholder.