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Ethereum Price Predicted to Climb in the Long Run as Buterin Explains Need for Higher Coin Values
Ethereum Price Predicted to Climb in the Long Run as Buterin Explains Need for Higher Coin Values

US Suggests New Legislation Proposal for Crypto Exemption from Securities Laws

  • Stavros Georgiadis
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    In the US, actions have recently been taken to exclude digital assets from being defined as securities.

US Suggests New Legislation Proposal for Crypto Exemption from Securities Laws
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This challenging question, as we have mentioned before, is related to legislation and rules that are of high importance about the future price of major cryptocurrencies in 2019 and beyond. In the US, actions have recently been taken to exclude digital assets from being defined as securities.

Are cryptocurrencies securities or not?

The ‘Token Taxonomy Act of 2018’ is in practice an important amendment to the Securities Act of 1933 and the Securities Act of 1934. Some important highlights in the bill worth mentioned are the following:

“… Direct the Securities and Exchange Commission to enact certain regulatory changes regarding digital units secured through public key cryptography, to adjust taxation of virtual currencies held in individual retirement accounts, to create a tax exemption for exchanges of one virtual currency for another, to create a de minimis exemption from taxation for gains realized from the sale or exchange of virtual currency for other than cash, and for other purposes.”

Regulation will have an impact on crypto in 2019

It is no surprise that the wiser adoption of cryptocurrencies is based on two major business aspects:

  1. Regulation and transparent rules
  2. Business applications and solutions

The lack of regulatory clarity for initial coin offerings (ICOs) and digital currencies is prohibiting the expansion of cryptocurrencies in daily business solutions. As global current regulations appear to be vague, without any concise rules, large businesses and corporations still have very limited motivation to invest a large amount of capital in building blockchain solutions.

It is still very hard to argue that anytime soon there will a global regulation framework that will have common rules and guidance for the majority of countries that are leaders in blockchain technology.

Western Union is optimistic on the adoption of cryptocurrencies as a financial instrument

Western Union, one of the largest global non-bank money transmission companies, mentioned that they are ready for the adoption and acceptance of the blockchain technology.

“Cryptocurrency might become one more option for a way for assets to be exchanged between people and countries. If that happens, we would be ready to launch.”

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Western Union has been reportedly testing Ripple as a potential cryptocurrency platform for business and financial transactions, with no decisions made yet on its usage. It is still unknown whether this idea will become a reality.

But the fact that a company which has a business model on sending money digitally is considering the adoption of blockchain technology may be interpreted as optimistic now for the future of cryptocurrencies. And a legislative decision making the business framework clearer for blockchain technology and ICOs would most probably help in their broader usage.

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Ethereum Price Predicted to Climb in the Long Run as Buterin Explains Need for Higher Coin Values

  • Jack Thomas
    🤷 Opinions

    Vitalik Buterin, the co founder of Ethereum, has come out and said that while the price of a coin is not that important, it is still a good thing for ETH to rise. He made mention of security, and the ecosystem development being better when the price of Ethereum is higher.

Ethereum Price Predicted to Climb in the Long Run as Buterin Explains Need for Higher Coin Values
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Ethereum is in a key phase of its development, having pioneered the smart contract blockchain. It is now in a position to take things further and grow its ecosystem as it looks to, for one, switch its algorithm from proof-of-work to proof-of-stake.

This development of the ecosystem will no doubt have an effect on the price of the Ether token, but more than that, Ethereum’s co-founder Vitalik Buterin has said that a higher Ethereum price is good for the development of the Ethereum ecosystem, as well as adds a higher level of security.

Essentially, it is a double-edged sword as the price of Ethereum is expected to rise when any cryptocurrency project is doing well, but the long term price prediction is then expected to rise, as Buterin adds it will help improve the project further.

Buterin’s beliefs

Buterin made his comments during an interview for Laura Shin’s crypto-focused “Unchained”.

In response to Shin’s question as to whether protocol designers and project leaders should be focusing on the question of a cryptocurrency’s price, Buterin spoke of how the Ethereum project had explicitly downplayed the importance of the asset’s value earlier on in Ethereum’s history.

“In part, it was counter-signaling to distinguish ourselves from other crypto projects that do pumping and lambo-ing way too much. But it was also about minimizing legal risk by basically trying to make the project seem more distant from something that would be covered by financial regulation.”

However, he has now gone on to explain that in today’s context, the price does in fact have a part to play.

“I can tell you what things are clearly important about why the price being higher rather than lower is good. One of them is obviously security. If the price is zero, then the network can’t be secure. That’s true in proof-of-work and proof-of-stake,” he added.

Long-term price prediction

With this being said, it makes sense that the price of Ethereum is thus being aimed at long-term growth. The project itself is working on improving its own worth and value as a blockchain project, and in that, the price of Ether should also naturally rise.

And, with a focus being on the importance of a higher price adding to the value of a blockchain project, this could even compound the growth of Ether's price in the long run.

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