[ad_1]
(CNN) After collapsing dramatically this spring, the crypto market is trying to come back.
What’s happening: Bitcoin and Ethereum prices jumped on Monday as investors showed willingness to increase their exposure even after recent pullouts. Bitcoin, which hit an all-time high of nearly $ 65,000 in April, fell to $ 28,800 last week. It was last trading above $ 34,000.
But the volatility coincides with further scrutiny from regulators that investors will need to watch out for.
Over the weekend, the UK financial regulator banned Binance, one of the world’s largest cryptocurrency exchanges, from offering certain services in the country.
The Financial Conduct Authority said in a statement on Saturday that Binance was not authorized to undertake any regulated activity in the UK. Cryptocurrency trading is not directly regulated in the UK, but other related activities such as the sale of derivatives require approval.
Japan’s watchdog also said on Friday that Binance is not registered to do business in the country.
The moves against a major player in the industry come as the digital coin business grows in popularity.
Earlier this month, the FCA published research indicating that around 2.3 million Britons now own crypto assets despite warnings about the risks. Only 38% consider their bets to be a bet, up from 47% in 2020, and around half say they plan to invest more.
Yet regulators around the world are starting to take a stronger stance.
Financial and banking authorities in China have said that financial institutions and payment companies should not participate in any cryptocurrency-related transactions and should not provide crypto-related services to their customers. The government is also tackling bitcoin mining.
Earlier this month, the Bank for International Settlements said banks that hold crypto assets would face tougher rules.
While banks’ exposures to crypto assets are currently limited, continued growth and innovation in crypto assets and related services, coupled with increased interest from some banks, could increase global financial stability concerns and risks. for the banking system, the institution said.
And the United States Securities and Exchange Commission recently rejected whether or not to approve a bitcoin exchange-traded fund, which could make it easier for investors to gain exposure to the market.
Setback: Stricter regulation has long been a threat to widespread crypto adoption, but governments have been slow to act. Now regulators appear to be more concerned, citing the need for greater consumer protection and the wider exposure of financial systems.
This could limit prices even though the market still has its share of bulls.
Meet the Short Seller Who Hopes Stocks to Dip
It should come as no surprise to learn that the founder of an investment firm named after Hindenburg is looking for stocks that will collapse and burn.
Nate Anderson, the founder of Hindenburg Research, has made a name for himself targeting companies he considers overvalued and whose finances are questionable. In other words: it chases imminent stock market explosions resembling the infamous German zeppelin that crashed in New Jersey in 1937, writes my CNN Business colleague Paul R. La Monica.
Hindenburg Review: Anderson is best known for taking on electric truck company Nikola last year. More recently, Hindenburg has targeted electric vehicle startup Lordstown Motors as well as fantasy sports company DraftKings.
The companies vehemently denied most of Anderson’s claims. But Nikola has since admitted he faces an investigation from the Securities and Exchange Commission, and Lordstown recently announced the abrupt resignation of its CEO and CFO.
The backstory: Anderson worked for market data firm FactSet as well as several hedge funds before establishing Hindenburg in 2018. He told CNN Business that he was often drawn to researching fraud, money laundering and money laundering. money and Ponzi schemes.
Now, much of his attention is focused on the Special Purpose Acquisition Blank Check, or SPAC, companies. Nikola, Lordstown Motors, and DraftKings all went public by merging with PSPCs instead of pursuing standard initial public offerings.
If you have strong finances and think your prospects are good, you usually go public the traditional way. PSPCs tend to be highly speculative, Anderson said. I have yet to see a SPAC that I think is a good one but I try to keep an open mind.
Opponents: Critics accuse Hindenburg of trying to bring stocks down with his research reports to make a profit. The company often actively bets against the stocks it is investigating. Anderson says the flashback comes with the territory.
Some investors will have a visceral reaction to negative hedging, he said. I don’t agree with the criticism, but I support the right to be critical.
Fed official warns of housing boom and recession
Readers of this newsletter are familiar with the exuberance that has recently gripped the global housing market, pushing prices past their 2008 peak and raising fears of a dangerous bubble.
But it’s not just Before the Bell that’s keeping an eye out. In an interview with the Financial Times on Monday, Eric Rosengren, Chairman of the Boston Fed, expressed growing concern.
Getting back to our 2% inflation target is very important for us, but the goal is to make it sustainable, Rosengren said. And for that to be sustainable, we can’t have a boom and bust cycle in something like real estate.
He added: I’m not predicting that I will necessarily have a bust. But I think it’s worth paying close attention to what’s going on in the housing market.
The median price of existing homes in the United States in May was $ 350,300, up 24% from the same month last year, according to a report by the National Association of Realtors last week.
Remember: Experts have noted that there are safeguards to prevent a 2008-type housing market collapse, including much stricter lending standards in the wake of the Great Recession.
But the Fed and other policymakers would be remiss not to keep a close watch on soaring prices, especially as the central bank continues to buy $ 40 billion worth of mortgage-backed securities per month, thus contributing keep borrowing costs artificially low.
(Copyright (c) 2021 CNN. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
Sign up for our newsletter for the latest news straight to your inbox
[ad_2]
picture credit