Cache | Regulatory Push Shakes Cryptocurrencies; Bitcoin falls below $20,000

The decline in the value of bitcoin has been constant for the past few weeks. And that trend has been exacerbated by remarks by US SEC Chairman Gary Gensler to the Practicing Law Institute

The decline in the value of bitcoin has been constant for the past few weeks. And that trend has been exacerbated by remarks by US SEC Chairman Gary Gensler to the Practicing Law Institute

Bitcoin, the most popular cryptocurrency, has been on the decline for quite some time now. Last week, crypto-related stocks fell after US inflation in August came in higher than expected. Bitcoin fell more than 6% on September 13.

The crypto asset hit a new low on Monday, dropping as much as 5% to hit a three-month low of $18,387. The decline appears to stem from regulatory concerns on the one hand, and a lackluster macro backdrop on the other, which is keeping investors away from risky bets like cryptocurrencies.

“Looking at the landscape right now, both fundamentally and technically, it’s not very pretty. There’s no immediate bullish catalyst that we can see who is going to support these markets and bring in a lot of new money. and liquidity,” said Matthew Dibb, COO of Singapore-based crypto platform Stack Funds. Reuters.

The decline in the value of bitcoin has been constant for the past few weeks. And that trend was compounded by remarks by U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler to the Practicing Law Institute (PLI). In a prepared speech dated Sept. 8, Gensler noted, “Nothing about crypto markets is inconsistent with securities laws. Investor protection is equally relevant, regardless of the underlying technologies.

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With this, he called on crypto platforms to register every function they perform with the regulator. This meant that crypto dealers, brokers, and lenders disclosed the functions they perform in the market with the SEC.

“I have instructed SEC staff to work directly with contractors [people running crypto projects] to get their tokens [projects] registered and regulated, where applicable, as securities,” Gensler noted.

This shook up the crypto market, where there are currently several platforms that perform all of these functions. This is in stark contrast to traditional securities markets, where these services are kept separate from each other, according to a blog post by Review of national legislation.

Read also | Crypto and digital assets come under the Biden administration’s crosshairs

Ether, the second-largest cryptocurrency, fell 3% to a two-month low of $1,285 and is down more than 10% in the past 24 hours. Ether could test $950 in the next few days, Dibb told the news agency.

Most other cryptocurrencies are dark red. The fall in the crypto market comes after the highly anticipated Ethereum merger peaked on Friday, cementing a new verification mechanism for cryptocurrencies on the block.

Ether’s value reportedly plummeted amid speculation that Gensler’s remarks suggested a new consensus mechanism could attract additional regulation. The exchanges around the upgrade have also been resolved.

(This article is part of Today’s Cache, The Hindu’s newsletter on emerging themes at the intersection of technology, innovation and politics. To get Today’s Cache delivered to your inbox, subscribe here. )

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