What happened
After starting Monday with uncharacteristically stable trading, top cryptocurrencies are now losing ground. Bitcoin (CRYPTO:BTC), Ethereum (CRYPTO:ETH), and Dogecoin‘s (CRYPTO:DOGE) tokens were down 2.9%, 5.4%, and 4.5%, respectively, over the previous 24-hour period as of 5 p.m. EST.
While potential new regulatory developments in the U.S. have previously been a source of crypto market volatility without amounting to much, it looks like some major changes could be coming soon. According to a report from Bloomberg, President Joe Biden will sign an executive order this week that will direct federal agencies to research potential regulations for cryptocurrencies, and the development is triggering sell-offs.
Image source: Getty Images.
So what
Biden will reportedly order federal agencies to look into new regulations for the cryptocurrency market and encourage investigation into the U.S. developing its own official digital currency. The executive order will also reportedly call for a deeper investigation into the impact that the rise of digital currencies is having on national security and the economy.
Some manner of cryptocurrency regulation has reportedly been in the works at the White House over the past year, and it appears that the expected rollout of an executive order this week is at least partially related to Russia’s invasion of Ukraine.
The U.S. has responded to the invasion of Ukraine with strict sanctions against Russia, which in turn contributed to the dramatic devaluation of the latter country’s currency and other economic pressures. However, some have speculated that Russian oligarchs and officials may be looking to Bitcoin and other cryptocurrencies to lessen the impact of the sanctions.
After initially prompting sell-offs across the broader cryptocurrency space, developments related to the invasion of Ukraine appear to have briefly prompted bullish momentum for cryptocurrencies late last month and early in March’s trading.
Bitcoin price data by YCharts.
Investment poured into Bitcoin, Ethereum’s Ether token, Dogecoin, and other digital currencies at the beginning of this month as investors bet that decentralized currencies could gain favor in light of tough sanctions facing Russia. However, it appears that the crypto market is now facing renewed selling pressures as crypto holders weigh the potential impact of a tightening regulatory climate.
Now what
Bitcoin still stands as the largest cryptocurrency by value and has a market capitalization of roughly $723 billion. Meanwhile, Ethereum’s Ether token is the second-largest cryptocurrency and has a market cap of roughly $299 billion, and Dogecoin is the 13th largest token by value and has a market cap of roughly $15.5 billion.
After volatile swings, Bitcoin has seen its token price fall significantly over the last year, but Ether and Dogecoin are still up big over the stretch.
Bitcoin Price data by YCharts
Bitcoin was launched in 2009 and helped spearhead the explosion of the cryptocurrency market. Despite the token now being well over a decade old and cryptocurrencies, in general, having made huge strides in adoption and acceptance, the crypto space is still somewhat akin to the Wild West.
Depending on the content of the executive order that’s expected to be unveiled this week, it’s possible that cryptocurrencies could be in for more turbulent trading in the near term. However, it’s also possible that the order will be pretty mild in the grand scheme of things and put forward relatively minor changes and initiatives that leave the door open for flexible future actions.
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