Market Insights / Commentary

A look behind the calm in cryptos

By James Putra

U.S. stocks made their biggest moves in two years last week, but there was relative calm in a market know for volatility: cryptocurrencies.

One reason emerged in Washington, where regulators were cautiously optimistic toward the up-and-coming digital assets.

Commodity Futures Trading Commission Chair Christopher Giancarlo and Securities and Exchange Commission Chair Jay Clayton emerged as heroes for the likes of Bitcoin and Ethereum in testimony before the Senate Banking Committee. Both were cautiously optimistic toward the space. Giancarlo saw wider use of blockchain technology and pledged to “do no harm.” Clayton was more caution, expressing a desire to protect ordinary investors from manipulation and fraud.

But the key takeaway is that neither watchdog wanted to rollback the spread of cryptos. Instead, their willingness to regulate the products gave confidence that the the space will survive and grow over the longer term.

Meanwhile on the other side of the planet, the value of number-crunching was on display as Russian nuclear engineers tried to hijack a supercomputer for mining Bitcoins. They were arrested after tripping security alerts on the machine, which could could perform 1,000 trillion calculations per second.

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