Bitcoin (BTC) has surged by over 5.3% in the last 24 hours as regulators continue to attack the cryptocurrency market. A few days ago, the biggest cryptocurrency exchange in the world, Binance, was sued by the U.S. Commodity Futures Trading Commission (CFTC) alleging that the exchange didn’t do enough to avoid U.S. citizens from using the platform. Other companies have also been under close scrutiny from regulators in recent months.
Bitcoin Erases Losses as it Grows by Over 5%
According to data shared by CoinGecko, Bitcoin registered a price increase of 5.3% in the last 24 hours. This has allowed the largest cryptocurrency in the world to recover after a few days in which its price tanked due to regulatory crackdowns in the United States. At the time of writing this article, Bitcoin’s market capitalization is close to $548 billion and it is currently leading the market in terms of gains.
We reported at UseTheBitcoin that the cryptocurrency companies in the United States are now searching for new jurisdictions amid regulatory crackdowns. Despite the fact that crypto companies would like to expand their solutions and products, it is becoming increasingly difficult for them to operate in the United States due to multiple reasons. The legal environment has definitely affected the capacity of firms to adapt to client’s needs and offer an enhanced experience.
U.S. Senator Cynthia Lummis said that there has been a clear failure of the United States to enact policy on that matter.
“The failure of the United States Congress to enact policy is pushing the industry to other countries,” she mentioned. “Europe is ahead of us in terms of its regulatory framework. Australia and the U.K. are getting ahead of us. Switzerland is far ahead of us,” she said.
A few days ago, we have also reported that Binance and its CEO Changpeng Zhao have been accused by the U.S. Commodity Futures Trading Commission (CFTC) of breaching trading regulations in the country. Due to this situation, Bitcoin fell from over $28,400 to below $27,000 for a short period of time in some exchanges.
Bitcoin Price During the Q1
Q1 was a very positive quarter for Bitcoin. The digital currency moved from $16,500 in early January to $28,500. This shows that there has been a clear interest from investors and users from all around the world in getting access to Bitcoin, the biggest cryptocurrency in the market.
In recent weeks, we have also experienced a banking crisis in which several banks have declared bankruptcy, including U.S. and European banks. Some of these banks include Silicon Valley Bank and Credit Suisse. Other banks such as Deutsche Bank have also been affected by this lack of trust in the traditional financial system. However, there might be yet a chance for this bank not to declare bankruptcy and create a contagion effect on other banks.
This comes after multiple years in which central banks have pushed interest rates below zero in some cases. In real terms, interest rates have been below zero even nowadays. Therefore, inflation has been growing and pushing prices higher in multiple countries, even in developed economies such as Europe or the United States.
Bitcoin, instead, has been working as a decentralized virtual currency for many years and it offers holders the possibility to be part of a different financial system that does not depend on central banks. Moreover, Bitcoin has a limited supply that can’t be changed and that is not controlled by a central authority, making Bitcoin ideal to face periods of high inflation rates.
Hence, it is possible to argue that Bitcoin has been working as a reliable inflation hedge, even after falling by over 70% in the last few years (from $69,000 to below $16,000). It will be very interesting to follow what could happen with Bitcoin in the coming weeks and months and whether there will be new attacks on crypto-related companies around the world.
Despite the fact that some crypto supporters call for regulations, there have been evident attacks on multiple companies in recent months, something that affected Bitcoin’s price and that could affect the whole cryptocurrency market.