Marcus Sotiriou, Analyst at the UK based digital asset broker GlobalBlock
Bitcoin (CRYPTO: BTC) is holding just above the 50-day moving average whilst there are fears around Russia invading Ukraine today. This fear is due to the uncertainty of war but also the fact that Joe Biden has said he will shut down the Nord Stream 2 pipeline if Russia decide to invade. This pipeline provides a significant portion of Europe’s natural gas so if it was shut down this could cause oil prices to climb and hence making inflation more of an issue. High inflation is the reason for the Federal Reserve raising rates and has the potential to lead us into a recession, due to slower growth from aggressive monetary policy.
The governor of the U.S. state of New Hampshire announced last week that he has signed an executive order establishing a commission on cryptocurrencies and digital assets. The governor said, “New Hampshire is a hub of financial innovation, and this executive order will further our commitment to attracting high-quality banking and financial businesses in a safe and responsible manner.” He explained that regulatory clarity from Federal and state governments allows technology and innovation to thrive.
UBS, the largest bank in Switzerland, is not as optimistic. On Friday UBS published its view on crypto legislation in the U.S. – it is clear they expect that, despite the persistent pressure for Congress to be more decisive, the U.S. Congress will take a long time to pass legislation. According to UBS, regulators would like Congress to develop legislation that regulates stablecoin issuers as banks.
I agree with U.S. Senator Ted Cruz, who criticised his colleagues in Congress for trying to regulate crypto without a deep understanding of the asset class. Ted Cruz says, “We should actually take the time to try to understand it. We should hold some hearings; we should consider the consequences. We shouldn’t destroy people’s lives and livelihoods from complete ignorance.” Regulation in this way would, in my opinion, be the catalyst for the next wave of institutional adoption, many of which have been seeking clarity for years.
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