Unfortunately, this was short lived, and the specter appears causing a dip in the cryptocurrency market.
Causes for the Decline
The fall I consider will be temporary and is mainly due to the fact that today a debate will be held in the US Congress on cryptocurrency regulation. The topic will be touched on in both chambers, the president or speaker will be Donald Beyer. The objective of the regulatory project according to its speaker is to protect investors from the high volatility of the market and correct regulation going forward.
Some of the things touched on in the report are outlined below.
This causes speculation on the price to the detriment of many investors and benefits what they call investor whales, which are powerful economic groups that make heavy investments and withdrawals.
There are people who have been victims of fraudulent schemes for many years.
Operationally the market allows privacy, and in some cases, total anonymity in transactions between people. This feature has lent itself to money laundering, and it is difficult to eradicate. The major exchanges have been very collaborative to avoid it and have implemented KYC and anti-money laundering checks.
Not All Bad News
I think that the SEC (The Securities and Exchange Commission of the United States) was already aware of this report and nevertheless approved the implementation of a Bitcoin ETF. On that occasion the mechanisms and regulations were established to protect investors.
Unfortunately, on the other hand the Biden administration is seeking to establish additional tax on cryptocurrencies. The tax would apply to the Bitcoin-dollar swap that is used to exchange the Bitcoin with fiat currency. However, so far there has been a lot of noise without concrete action, which is why I consider the dip in the price of Bitcoin to be due to prudence and a little fear of investors waiting to see how events happen.
Already this year the market has faced steep challenges in the form of the pandemic as well as the ban in China. This ban was also the reason for the departure of the mining community from China. Media attacks about the environmental damage of Bitcoin also affected the price negatively. Despite this Bitcoin recovered as usual and with it the cryptocurrency market.
There have also been many positive things that have happened this year.
- Launch of the new Bitcoin protocol, the network was updated on the 14th of November and more privacy and efficiency in transactions is expected. Improved smart contracts are also planned.
- Today’s launch of VanEck futures ETFs.
- Bitcoin whales are buying in the face of the drop, and a rebound is already noticeable.
- Eventual rebate on transaction fees.
- Positive changes in the perception of the important JP Morgan group from their CEO about Bitcoin. They estimate that the currency may pass the $120,000 mark.
Bitcoin will resume its path and with it the majority of the crypto market, at least this is the trend that is projecting a very promising year in 2022.