War ‘Just Getting Started’ – $1 Trillion Crypto Crash Sparks Serious Bitcoin and Ethereum Price Warning
Bitcoin, ethereum and crypto are reeling from shock regulations in the past week, which some fear are part of a plan to “quietly” ban bitcoin and crypto.
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Bitcoin prices have fallen over the past week from highs of more than $24,000 per bitcoin so far this year, dragging down the price of ethereum and other major cryptocurrencies and pushing the combined crypto back below the closely watched $1 trillion level.
Now, despite a legendary trader making a surprising u-turn for bitcoin, ethereum and crypto, fears are growing that a looming war on crypto “is just beginning.”
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The US Securities and Exchange Commission (SEC) is preparing to sue the issuer of one of the largest so-called stablecoins, Paxos, for selling BUSDBUSD as an unregistered security, it was reported by The Wall Street Journal on Sunday.
On Monday, the New York Department of Financial Services (NYDFS) ordered Paxos to stop issuing BUSD, the Binance token, the third-largest stablecoin that has a market capitalization of around $15 billion – although Binance warned that the market capitalization of BUSD will now “only decline over time.”
“The SEC war on crypto is just beginning,” Marcus Sotiriou, market analyst at digital asset broker GlobalBlock, said in an email.
Last week, major crypto exchange Kraken was forced to shut down its US betting service after being fined $30 million by the SEC.
SEC Chairman Gary Gensler, who has previously said he considers almost all cryptocurrencies to be securities that require registration with his agency, said the charge against Kraken “should put everyone operating in the crypto market on notice.”
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However, some crypto market watchers remain optimistic about the outlook for bitcoin, ethereum and other cryptocurrencies, predicting that they will be tested in the coming days and remain mainly guided by the Federal Reserve’s program of interest rate hikes.
“While bitcoin has shown general resilience in this rally that started on January 1st, we are now looking at a key level, which in the coming days should indicate whether the rally continues or whether we see a steeper correction,” Joe DiPasquale. CEO of BitBull Capital, said via email.
“After losing both the $23,000 and $22,000 levels, bitcoin is now making a downside test, which could see it try to regain $23,000. If this fails, we could see the market leader fall towards $20,000 quite quickly. As usual, the market is also dependent on macroeconomic development, and given how December consumer prices were found to be higher than previously expected, the market may begin to consider a larger interest rate increase in the next [Fed meeting].”
Meanwhile, Brian Armstrong, CEO of Kraken rival Coinbase, has said that the exchange will “gladly” defend its own crypto staking service in court if necessary.
“Coinbase’s staking services are not securities,” Armstrong posted to Twitter.
“Regulations are also a concern for the crypto space, especially after the $30 million fine the SEC imposed on the Kraken exchange,” DiPasquale added. “That said, we think it’s better to get regulatory clarity in a sluggish market, as opposed to stricter developments during a full-blown bull market.”
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