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The Street
The Street
Rob Lenihan

Crypto Price Check: Bitcoin Flat, Aptos Has a Rocky Launch

Cryptocurrency prices were a bit sluggish on Oct. 20, while a newcomer had a tough debut.

Bitcoin at last check was barely moved the needle to $19,044.37, according to data firm CoinGecko. Ether, the native currency of the ethereum blockchain, was flat at $1,284.83, while dogecoin was up nearly 1% to $0.059928. 

'Sitting on the Sidelines'

"Bitcoin's price continues to remain near flat, as investors are clearly waiting to see whether the current wedge will result in a breakout or further leg down," said James Edwards, crypto editor with Finder. 

"Until then most traders are likely to sit on the sidelines with cash waiting for the market to show a clear sign of where it will go next."

He added, however that "bitcoin's stability against the ever strengthening U.S. dollar should be seen as an achievement, and perhaps in some ways a gain." 

"While many major foreign currencies have fallen against the greenback over the past few weeks, bitcoin's resilience is an interesting sign of sustained market confidence by holder," he said. "It's important to remember that bitcoin is also a buy and hold asset, so volatility – or lack of it – isn't always the most interesting factor at play."

Meanwhile, Edwards said, Aptos, the new layer-1 blockchain made by a team of former Meta developers who worked on the Facebook Diem project, had a rocky launch, "despite substantial hype." 

Aptos had opened at around $12. It recently was up 2.2% at $7.22.

"The main reason for the rocky launch revolved around two things: The team had not publicly disclosed the tokenomics model, and the network was considerably slower than promised," Edwards said,

Dispelling FUD

Aptos developer Mo Shaikh had to take to Twitter to release the tokenomics schedule and try and dispel FUD -- fear, uncertainty and doubt.

"Given the importance of tokenomics to investors and the time there was to prepare for the launch, this is extremely poor on behalf of Aptos, and Crypto Twitter did not let them off lightly," Edwards said. 

"Almost all of Crypto Twitter was united in bashing Aptos for its lackluster launch, which feels somewhat deserved given the project's substantial publicity and the $350 million in funding it received," he added.

Aptos is trying to market itself as a solana killer as much as an ethereum killer, Edwards said, "meaning it's going for the upper limit of transactions per second with the team claiming the chain can support 160,000 tps, nearly 3 times as much as Solana's advertised speed or nearly 7 times more than Visa." (V)

"Despite these grand claims, an anonymous developer named Paradigm Engineer 420 reports that Aptos's tps was closer to 4 tps on launch day," he said.

Mastercard (MA) unveiled its Crypto Source program on Oct. 17 that is intended make things smoother between banks and crypto investors.

'Compliance and Security'

"Cryptocurrencies were meant to disrupt banks and middlemen like Mastercard and Visa, but now Mastercard is to make it easier for banks to get involved – so as to bring crypto to the masses who are interested in decentralized cryptocurrencies," said Winston Ma, managing partner of CloudTree Ventures.

Ma said that Mastercard will act as a bridge between Paxos, a crypto trading platform already used by PayPal, (PYPL) and banks. Mastercard and Paxos will handle regulatory compliance and security — "two core reasons banks cite for avoiding offering cryptocurrency trading to their clients," he said.

"It’s interesting to see that the trust in decentralized Web3 to some extent may still need to come from large financial institutions," said Ma, author of "Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse."

David Lesperance, managing partner of immigration and tax adviser with Lesperance & Associates, noted the case of crypto exchange FTX and its founder, Sam Bankman-Fried. Both are subjects of an investigation by the Texas State Securities Board for allegedly offering unregistered securities products in the U.S. through its yield-bearing services.

"The predictable has now happened, with U.S. regulators investigating whether a crypto exchange and its founder has broken laws relating to selling unregistered securities," he said. 

'Eerily Reminiscent'

The investigation focuses on whether FTX has been illegally offering Texans accounts that pay interest on crypto deposits. Lesperance said that "TSSB Enforcement director Joe Rotunda is taking the position that the accounts are securities and that FTX should have registered with the state before signing up its residents."

Lesperance said state regulators being ahead of the federal government is "eerily reminiscent" of the online-gambling industry, which eventually came under fire by regulators.

"SBF would be well to remember that David Carruthers, CEO of one of the largest online gaming companies, was arrested at a Texas airport and subsequently served a 33-month sentence," he said, referring to the chief executive of BetOnSports. 

In contrast, Calvin Ayre, who launched the online gambling company Bodog, stayed outside the U.S., while his lawyers negotiated with U.S. regulators and later paid a fine, Lesperance said.

"Just as Ayre’s preparation for regulation resulted in his ongoing personal freedom and his company not only surviving but thriving, the actions taken by founders across the crypto sphere will determine who will still be in business in the future," he said.

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