Bitcoin price surges unexpectedly despite bears controlling the market
Bitcoin’s ongoing recovery has helped bring the asset’s monthly losses down to the 7% range.
- The market is facing bearish pressure thanks to China’s recent ban that forced many prominent mining pool operators to close shop permanently.
- Tesla CEO Elon Musk recently claimed that while regulations may be successful in slowing down the crypto industry temporarily, they cannot stop its inevitable growth.
- Federal Reserve Chairman Jerome Powell recently noted that he has no intention of banning Bitcoin (BTC) or any other cryptocurrency soon.
The last couple of days have been quite tumultuous for Bitcoin (BTC). The world’s largest cryptocurrency by total market capitalization dipped below the $41,000 resistance only to garner solid upward momentum and rise above the $44,000 threshold. At press time, BTC is trading for $48,500.
Analysts believe that ever since Bitcoin failed to break the $53,000 mark cleanly, it has been dealing with a lot of investor uncertainty. Plus, the recent liquidation of $3.4 billion worth of futures contracts, along with China’s ban on its local digital asset sector, could have played a major part in the development.
In response to China’s blanket ban, several major trading platforms, including Binance and Huobi, have halted some of their services within the nation’s borders. The ban has also forced some of the largest mining pools in the world, including SparkPool and BeePool, to shut down operations completely.
The bearish mood surrounding the market was also confirmed by Elon Musk. At a recent conference, Musk stated that the current environment is one where investors must tread with a certain degree of caution. However, he then went on to add: “It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement.”
Federal Reserve not looking to ban Bitcoin, says chairman
As part of a recent Q&A session, Federal Reserve Chairman Jerome Powell was quoted as saying that while the government does need to regulate the cryptocurrency market a little, a blanket ban on Bitcoin — or any other digital asset for that matter — is not on the cards. That being said, Powell did raise some concerns regarding the validity and utility of various stablecoins, a market that has grown tenfold — from $8 billion to $81 billion — since the start of 2020. Powell added:
“Stablecoins are like money market funds [and] like bank deposits, but they’re, to some extent, outside the regulatory perimeter, and it’s appropriate that they be regulated. Same activity, same regulation.”
What lies ahead for the American crypto market?
As a quick refresher, American policy members have been mulling over the prospect of creating their very own central bank digital currency (CBDC). The Fed has already commissioned several research projects and grants to assess the advantages and potential drawbacks of issuing a CBDC. Therefore, it will be interesting to see how the coming few months play out for the market.
Disclosure: The author owns a range of cryptocurrencies at the time of writing