The SEC gave us a nasty November surprise with enforcement actions against two ICO projects. What surprises do they have for us this week? In today’s update, I’ll also take a look at the Bitcoin chart to see if there is any indication of its price bottoming out in the new year.
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SEC Surprised with Enforcement Against ICOs
Last Friday the SEC announced enforcement against startup companies Paragon and AirFox, for the ICO of their coins, PRG and AirToken (AIR) claiming they conducted unregistered sales of securities. These projects could be the ‘low-hanging fruit’. We know more are in their sights, including SALT and ex-board member Erik Voorhees. Up to this point, we have no regulatory clarity, only enforcement clarity and a ‘path to compliance’ for ICO projects which leaves the community confused. Will more ICOs start ponying up a $250k fine and buying back tokens rather than risking non-compliance? And if so, will we start to see projects announcing their intent this week? And of course, I’d like to hear from you in the comments. Which project would you most like to see refund their investors?
CB Looks into the Future
Regardless, in the wake of ICOs getting into trouble, Crypto Briefing has started to look into the future. The conventional wisdom is that security token offerings, or STOs, and other compliance solutions may take over where ICOs may leave off. Crowdfunding is not going away. And for the savvy investor, there will still be hundreds of startup companies in the blockchain space that might create excitement. To help ICO and retail investors understand this evolving space, Crypto Briefing begins a week-long series on Monday. The project focuses on Security Tokens, and other forms of compliant tokenized asset sales. Check them out for expert commentary from some of the pioneers in security tokens, including a comprehensive introduction from Securitize President Jamie Finn.
Where Could Bitcoin Find Bottom?
Now let’s take a look at cryptocurrency price action. Specifically, Bitcoin which broke below a psychological level of $6,000 last week. On the weekly chart, there is a formation of a bearish engulfing candlestick chart pattern which may have opened doors for further drops towards the 78% Fibonacci retracement level at around $4,906.
This level is especially important because it acted a resistance back in August 2017. This was before Bitcoin’s price took off to reach over $19,000 within three months. With that, we may see Bitcoin’s price drop to that level before regaining energy to the upside and bottoming out heading to 2019.
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On a lighter note, the good news is that the people who are almost always wrong about cryptocurrency are once again predicting its doom. Bloomberg reports that Bitcoin could plunge to $1500 any day now, while our old friend, Nouriel Roubini is suggesting that despite recent losses, it’s nowhere near its baseline – which he claims to be zero. And that, coincidentally, is exactly what he knows about Bitcoin. Again, I’d like to hear from you, what do you think about the future of Bitcoin’s price? Let me know in the comments, subscribe, and tune in again for more updates tomorrow. Also, remember that as the 4th point of the IDDA technique, you must calculate your risk tolerance before deciding on the investment strategy that is suitable for your portfolio.
Don’t forget to complete your risk management due-diligence before developing your investment strategy.