Bitcoin hits all-time high, moving markets but not Washington

The price of a single bitcoin hit an all-time high on Tuesday, topping $68,800 for the first time since November 2021, driven by a cash injection following the approval of an exchange-traded fund (ETF) to hold the cryptocurrency. The rise continued.

The Securities and Exchange Commission (SEC) approved the first U.S. physical exchange-traded fund in January, lending legitimacy to once-fringe digital assets and opening the door to billions of dollars of investment from financial institutions. Ta.

“Bitcoin’s recent surge in value and potential factors contributing to its price increase include Bitcoin’s upcoming halving and increased adoption by institutional investors through crypto ETPs and derivatives. I think it’s a combination of things,” said Rajeev Bumrah, senior vice president of digital finance. At Moody’s Investors Service.

“The impending halving entails a significant reduction in mining rewards from 6.25 BTC to 3.125 BTC per block, coinciding with increased demand driven in part by the growing popularity of spot crypto ETPs.”

Bitcoin dominates the global cryptocurrency market, accounting for $1.3 trillion of the approximately $2.6 trillion in cryptocurrencies in circulation around the world, according to crypto data aggregator CoinGecko.
The crypto market’s turnaround since last year, when economists also predicted a widespread recession in the United States, is noteworthy. The price of Bitcoin has more than tripled since January 2023, when it was trading at less than $20,000.

Rising tides lift all boats, and cryptocurrencies are no exception. Prices of other digital asset tokens, including Ethereum, have soared, albeit slower than Bitcoin, which has risen more than 26 percent since last Monday.

However, Bumrah cautioned that investors “should exercise caution, recognizing that the future path of the digital financial ecosystem, particularly the crypto market, is expected to pass through periods of high volatility.”

Cryptocurrencies face a difficult road in Washington, and the soaring price of Bitcoin is unlikely to prompt policymakers to regulate cryptocurrencies anytime soon.

“This will have no impact on the legislative agenda,” said Christopher Grieco, a former Justice Department and President Trump official who is now general counsel and chief compliance officer at Web3 company Rain Card. expected.

“The time for pre-election and lame-duck considerations is rapidly drawing to a close, and Warren Gensler’s anti-crypto army does not see BTC prices as a positive, but as further demands for strict enforcement. Grieco added. Sen. Elizabeth Warren (D-Mass.) and Securities and Exchange Commission Chairman Gary Gensler are two vocal critics of the industry.

A number of virtual currency bills have been introduced in this Congress. Cryptocurrency proponents, including Coinbase, are particularly fond of the 21st Century Financial Innovation and Technology Act, also known as FIT21, which establishes a comprehensive regulatory framework for digital assets.

Cryptocurrency advocates are also defending Warren’s bipartisan Digital Assets Money Laundering Prevention Act (DAAMLA), which would allow the U.S. to do so without actually impacting illegal actors. They argue that this harms competitiveness.

In February, the Blockchain Association sent a letter to the House Financial Services Committee and the Senate Banking Committee that included more than 80 signatures, including Grieco and other military veterans and national security experts. He had expressed concerns about anti-money laundering laws.

However, Warren’s DAAMLA bill would unintentionally impede law enforcement and national security efforts by moving a large portion of the digital asset industry offshore. This change would also This could lead to an increase in the liquidity of unused offshore exchanges and a loss of valuable U.S. expertise and visibility in the blockchain space. Furthermore, even if this law were to go into effect, the would have no meaningful repercussions for those who violate the law,” the letter said.

Last summer, the agency sued major cryptocurrency exchanges Coinbase and Binance. Although the facts of the two lawsuits are different, both lawsuits allege that the exchange failed to register with the SEC despite selling virtual currency that the exchange said could be a security. .

“Wrong and uncertain enforcement should be enough impetus to create legislative solutions that provide clarity and protection for cryptocurrency participants, but it seems increasingly unlikely that Congress will pass anything this year. “It seems like it’s happening,” Grieco said.