Bitcoin and Ethereum retreat as the US moves to regulate crypto

Bitcoin and Ethereum both retreated, losing some of the gains made yesterday as the US and President Joe Biden move to regulate digital tokens.

Bitcoin fell 5.67%, back below US$40,000 to US$39,356, while Ethereum was down 5.18% to US$2,596.

The early executive announcement release by Treasury Secretary Janet Yellen had caused some respite as the markets bounced, with Bitcoin pushing past US$42,000.

However, according to Ipek Ozkardeskaya, a senior analyst at Swissquote, “yesterday’s unexplained optimism could give way to a soft session, as the news and fundamentals give little reason for optimism right now”.

But Naeem Aslam, a market analyst at AvaTrade, said the news of regulation in the markets can only be a good thing.

“Traders are still digesting the crypto regulation news and trying to make sense of them if they are healthy for the crypto industry,” Aslam said.

“One thing is clear and that is the fact that we have regulation for cryptos now. This means cryptos are here to stay and this should encourage other investors and companies to join the trend.”

In other news, the EU reaffirmed that economic sanctions imposed on Russia include the ban against trading cryptocurrencies, downplaying the risk of oligarchs bypassing sanctions by using digital tokens.

According to Ran Neuner, host of CNBC’s Crypto Trader, 2022 will be a pivotal year for crypto, claiming many have no option but to turn to digital currency.

“They (governments) put people in a position where they had no choice but to flee to the other system,” Neuner said in Al Jazeera.

“Russians that are living in the US but have bank accounts in Russia have had their credit cards cut off. Essentially, people are forced onto the alternative financial system,” Neuner added.

In some of the altcoins, Solana was down 7.73% to US$82.55, Terra was down 2.53% to US$95.33 and Polkadot was 4.83% lower at US$16.93.