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Bitcoin Shows Resilience Amid Global Political Setback

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Source: Adobe / Miguel

The crypto market remains in a kind of funk. Having been diverted by the announcement of Tesla’s which would no longer accept bitcoin (BTC) as payment for its cars, has been dragged further down by a steady stream of government and regulatory pushbacks.

From China’s crackdown on mining to regulatory warnings against Binance, a number of government actions have served to keep cryptocurrencies moving sideways or backwards. However, while industry observers agree that such actions have had a negative influence on the market, they also agree that they have not been as negative as they could have been.

In fact, commentators speaking to Cryptonews.com claim that bitcoin’s stubbornly clinging to a $ 30,000 resistance level is both a sign of resilience and weakness. At the same time, they claim that government and regulatory action cannot subdue cryptocurrency in the long run, with Bitcoin in particular designed to evade centralized control.

Governments act, cryptocurrency falls

“Government actions, particularly in China, have had a significant short-term negative impact on the crypto market,” said Lou Kerner, partner at Blockchain Coinvestors .

China reminded its financial institutions of an old anti-speculation law on May 18, at a time when BTC had already fallen from roughly $ 58,000 to $ 45,000. This news then sent BTC down as low as $ 35,000 in three days, with the rest of the crypto market following suit.

That was followed in June by a severe crackdown on Bitcoin mining in China. Along with other government measures, many Chinese were forced to liquidate, at the same time that demand for cryptocurrencies in China declined, ”Kerner told Cryptonews.com.

Other analysts agree with this assessment, even if they suggest that government / regulatory actions are not the only cause of current market problems.

“I think the biggest factor impacting crypto prices negatively has been the impact of recent government and regulatory actions from China to the US and elsewhere. The recent recovery of the dollar has been the other culprit, ”said Fawad Razaqzada, analyst at ThinkMarkets .

Aside from China, the United States has been another site of government interventions related to cryptocurrencies. In recent weeks, we have seen calls from the Internal Revenue Service (IRS) for stricter regulation, investigations into Binance from the Commodity Futures Trading Commission ( and the Justice Department and the IRS) and demands from legislators for tougher rules in the face of ransomware attacks.

That’s just America. Regulatory and government actions have taken place elsewhere in the past month, from the UK and the EU to Singapore, Thailand and beyond. In that time, the total value of the crypto asset market has decreased from more than $ 2 trillion to around $ 1.3 trillion.

Bitcoin Shows Resilience Amid Global Political Pullback 102

Source: coingecko.com

Resilience to regulation

However, most analysts say the market has done better than some expected, especially given the extent of the crackdown in China.

“I think these government actions have absolutely had a negative short-term effect on prices. However, now we have seen that bitcoin does not want to go below USD 30K, it did not fall back to USD 3K, “said Mark Jeffery, founder / CEO of the emergency response network Guardian Circle .

He suggested that pushing bitcoin down is like “trying to hold a beach ball underwater.” He also highlighted how, at this point, he benefits from a growing number of hodlers and whales, or large BTC holders, willing to hoard coins during a recession.

“Older wallets just refuse to sell, no matter what. They know that bitcoin has held its value better than the dollar for ten years, “he told Cryptonews.com.

Fawad Razaqzada also said that bitcoin has not dropped to $ 10,000, where it was before the market started to rally towards the end of 2020, should be encouraged.

Well, looking at bitcoin prices, they’ve been hovering between $ 30K and $ 40K for most of the two months. The fact that we are not seeing significantly lower prices due to increasing levels of regulation and government actions indicates resistance and strength for Bitcoin and other cryptocurrencies rather than weakness, “he said.

However, even though Bitcoin has reached a seemingly solid level of support, it must be remembered that government actions, along with other factors, brought it down from almost $ 65,000 rather quickly.

“The strong negative market reactions to these moves highlight the infancy of the market and the lack of depth for buyers to intervene as Chinese sales accelerated and Chinese buyers declined,” said Lou Kerner.

Anathema to the government

Despite the obvious fact that bitcoin has halved from its all-time high of around $ 65,000, industry figures are confident that governments can’t really do that much to keep it low in the long run.

“But I think ultimately trying to stop Bitcoin is like trying to stop the Internet – you can’t,” said Mark Jeffery.

He suspects that we will witness a growing number of “attacks” by governments and regulators.

“We will definitely see an increase in demand for KYC exchange. [conozca a su cliente]; the idea of ​​anonymous wallets and transactions is anathema to the government: they like a financial panopticon. Your stated reasons for this are AML [anti-lavado de dinero] and terrorism, which are legitimate up to a point, but I suspect they are not the real reasons, ”he said.

Jeffrey is particularly concerned about decentralized finance platforms (DeFi) and decentralized exchanges (DEX), which tend to circumvent government wishes for transparency quite blatantly.

“If these things are necessary for KYC in all the wallets that connect to them, I don’t see how they will survive. I don’t see how that applies either, but the government could theoretically start fining and arresting anyone who implements a DEX or DeFi smart contract, “he added.

However, Lou Kerner pointed out that not all countries will adopt an intolerant approach to cryptocurrencies, as the case of El Salvador highlights.

“In the long term, cryptocurrencies are much larger than any country or group of countries,” he said. “Countries that crack down will see an exodus of talent, where possible, as builders look to build in jurisdictions more favorable to regulations.”

Fawad Razaqzada also said that it would be difficult to completely suppress the use of cryptocurrencies.

He concluded,

“I don’t think the authorities can completely restrict access for everyone, everywhere. It is clear that governments are threatened by the rise of cryptocurrencies as an alternative form of payment that could eventually replace or at least supplement fiat currencies. “

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Learn more:
– Here are the ways governments could attack Bitcoin, and none of them sound attractive
– Bitcoin can exceed USD 66,000 in 2021 and USD 400,000 in 2030 – ‘Expert Panel’

– EU regulation may harm small crypto players, Stablecoin users and Elon Musk
– CBDC Shilling and Bitcoin Bashing could reach G20 level

– BNB recovers as Binance CEO bows to regulators amid yet another setback
– ‘Big news in global crypto policy’ as the FATF moves into October

– Crypto regulation and decriminalization may be on the way in Africa
– ‘Knives come out’ when cryptoverse responds to BTC FUD by US Senator.

– The lobbying power of the crypto industry grows as former officials switch sides
– Turkey bans crypto payments

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