Bitcoin Recovers to $22,000 as US Regulatory Fears Subside
Bitcoin, the world’s most popular and valuable cryptocurrency, bounced back to around $22,000 on Wednesday, after a sharp selloff earlier this week triggered by worries about a possible US crackdown.
The digital coin fell below $20,000 on Monday, after the Securities and Exchange Commission (SEC) announced that it would postpone a decision on whether to approve a Bitcoin exchange-traded fund (ETF) proposed by VanEck, a leading asset manager. The SEC said it needed more time to solicit public comments and evaluate the potential risks and benefits of the ETF, which would allow investors to buy and sell Bitcoin through a regulated platform.
The SEC’s move raised fears that the US regulator might impose stricter rules or reject the ETF altogether, which could dampen the enthusiasm and demand for Bitcoin among institutional and retail investors. Bitcoin ETFs have been widely anticipated as a catalyst for mainstream adoption and legitimacy of the cryptocurrency, as they would provide easier and safer access to the market.
However, Bitcoin’s decline was short-lived, as the Treasury Department issued a statement on Tuesday clarifying its stance on reporting crypto transactions. The Treasury said that it would only require banks and other financial institutions to report transactions involving digital assets worth more than $10,000, in line with the existing rules for cash transactions. The Treasury also said that it would not impose any new reporting requirements on individuals or businesses that use crypto for personal or commercial purposes.
The Treasury’s statement eased some of the concerns that the US government might impose harsher regulations or taxes on crypto transactions, which could discourage users and investors from participating in the market. The statement also signaled that the Treasury recognized the potential benefits and innovation of crypto assets, and that it would seek to balance the need for oversight and compliance with the need for growth and development.
Bitcoin’s price recovered to $22,000 on Wednesday, as traders and investors regained confidence and optimism in the crypto market. Some analysts and experts expect Bitcoin to resume its upward trend in the long term, as demand from institutional and retail investors remains strong and supply is limited. Bitcoin has a fixed supply of 21 million coins, of which about 19 million have already been mined and circulated.
Bitcoin has gained more than 300% in the past year, reaching an all-time high of $64,863 on April 14, 2021, according to CoinMarketCap, a website that tracks crypto prices and data. Bitcoin’s market capitalization, or the total value of all the coins in existence, is currently around $410 billion, making it larger than many of the world’s biggest companies and countries.
By Sydney — Bing Search
