So everyone knows that Bitcoin suffered a huge plunge earlier this year. The fall amounted to around 60% at its peak before stabilizing recently. However, what many are not aware of is how much total trading volume fell during the volatility. While stock market losses are often associated with increasing trading, that did not happen with bitcoin. Volume is stuck at about half its peak from December, and touched its lowest level in two years in February. This has many wondering if the currency is waning in popularity.
FINSUM: This piece was interesting to us because it contrasts with what you hear about the explosion in popularity of cryptos.
Bank of America just put out a weird warning that caught our eye. The bank—the largest retail bank in the US—said that it may face “substantial costs” as it deals with cryptocurrencies. In its SEC filing, the bank warned that cryptos were one of its risk factors for investors. The bank elaborated, saying “The widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services”.
FINSUM: Was this reference to some future risk of business disruption, or does BofA have some exposure to cryptos that is not well understood? Certainly something to pay attention to.
While all the focus is understandably on stocks, Bitcoin is continuing to see a huge exodus of buyers. The market is now down to around $6,000, or about 70% from its peak of near $20,000. Bitcoin, and crypt currencies generally, have been brutalized by a number of regulatory announcements which seek to reign in the currencies. These include in South Korea—one of cryptocurrencies’ biggest markets, as well as by the SEC in the US, where chairman Jay Clayton has become a staunch enforcer.
FINSUM: We have been saying for months that there was simply too much regulatory risk to sustain the high valuations. That prediction has certainly proved right and we think it has further to run.
There has been hype for several years about the chances for the growing tech industry to absorb and dominate some of the domain of the finance sector. Examples already abound, such as tech companies taking market share in currency transfers or in every day payments. Amazon is providing payment services and financing to merchants, for example. Now big banks are fighting back, pushing regulators to subject tech companies to the same rules and scrutiny to which they are forced. They argue that not doing so will hinder transparency and threaten the global financial system.
FINSUM: This just seems like another of the many areas where a regulatory push is mounting against tech.
Okay, we are calling it. Officially. While some had been holding out hope that Bitcoin might regain ground back up to its peak of around $20,000, the bottom appears to have officially fallen out. The cryptocurrency is now trading under $8,000, down around 60% since its peak. The currency continues to suffer setbacks from regulatory efforts in various jurisdictions, and it has put bears firmly in control.
FINSUM: Bitcoin and cryptos will be around for a long time, but the price discovery for a realistic level is going to be painful.
General Motors is ramping up its efforts in the self-driving car space. In what has become somewhat of a new age automotive space race, the company is doing well in its testing of autonomous vehicles. That said, it is still well behind the performance of Waymo, Google’s self-driving car unit. GM’s vehicles are getting very autonomous, with a human driver only needing to intervene 0.797 times for every 1,000 miles driven in 2017, down from 18.51 in 2016. Google’s number is 0.179 per 1,000 miles. Some criticize this “disengagement” metric because it is not well controlled or defined.
FINSUM: There is probably a little bit of “play” in how these stats are recorded, but if they are anything near the truth, the technology sounds like it is performing very well. GM says it wants to debut self-driving cars in 2019.