Crypto price check: Bank of England action could affect Bitcoin: analyst
The Bank of England’s surprise move could have implications for the world’s largest cryptocurrency, a crypto analyst said.
Shares rose in the previous session after Britain’s central bank said it would carry out emergency purchases of British government bonds in a bid to restore “orderly market conditions” amid a historic fall in the pound.
James Edwards, crypto specialist at Finder, said the bank’s decision “could have interesting outcomes for bitcoin.”
“A New Opportunity for Bitcoin”
“If the policy is expanded, or other nations follow suit, it could see renewed interest [bitcoin,] which greatly benefited from aggressive monetary policy throughout 2020 and 2021,” he said.
“Traders will want to keep an eye on how other central banks react, as will any discussion of reopening [quantitative easing] can have a sudden effect on [the bitcoin] price.”
While bitcoin’s narrative as a safe haven or inflation hedge has not materialized, Edward said, “it appears to have found clear support just below the $20,000 mark for several months now, despite major fiat currencies continuing to slide toward the dollar.”
“This presents a new opportunity for bitcoin, which could find a new audience among the millions of affected citizens who are witnessing the rapid failure of their central banks to contain inflation and combat the rising cost of living,” he said.
Edwards said that “if central bank currencies continue to slide severely, and quantitative easing resumes on a larger scale, both the bitcoin and cryptocurrency markets could experience a renaissance as traditional finance continues to battle macroeconomic headwinds.”
Bitcoin was down about 1% to $19,090 at last check on September 29, according to data firm CoinGecko. Ether, the native currency of the ethereum blockchain, fell 1.1% to $1,303.33, while dogecoin fell slightly to $0.059953.
Comprehensive framework
The White House recently published its first-ever comprehensive framework for regulating the fledgling financial industry, whose hallmarks are eliminating both middlemen and controlling centralized entities.
“This framework shows that the days when government agencies feel they can afford to ignore digital assets and the ecosystem they support are long gone,” said Winston Ma, managing partner of CloudTree Ventures.
“Among them, the Treasury Department is emerging as a lead agency for the upcoming cryptocurrency regulations.”
He said Treasury officials outlined seven priority actions they will take, including ongoing monitoring, improving regulation and enforcement, and updating bank secrecy regulations, among others.
“The understanding of the market is that the Treasury will now carry out risk assessments on decentralized finance, followed by [nonfungible tokens],” said Ma, author of “Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse.”
“In fact, Treasury recently issued a request for comment in the Federal Register seeking feedback on the illicit financial and national security risks posed by digital assets.”
South Korean prosecutors recently announced that Terraform Labs co-founder Do Kwon, who is currently under investigation in South Korea for the $40 billion collapse of algorithmic stablecoin Terra, is facing a red notice from Interpol.
“Losing Everything”
David Lesperance, managing partner of immigration and tax advisor Lesperance & Associates, said the South Korean government has also seized $183 million in crypto from tax evaders since the beginning of 2021.
The seizure covered 17 cities, including the capital Seoul, and targeted people and businesses that ignored or broke tax rules, he added.
“Across the Pacific, the IRS is also dramatically increasing its efforts to catch crypto tax evaders,” Lesperance said.
“The agency has issued a so-called ‘John Doe subpoena’ requiring MY Safra Bank to hand over crypto transaction data for SFOX, a digital currency prime broker that used the bank.
He added that “here are many opportunities for the IRS to get crypto taxes rolling as trading volumes reach new highs in the US”
“After years of fooling themselves that crypto transactions were untraceable, crypto enthusiasts are trying to catch up,” Lesperance said.
“For those who stick their heads in the sand and hope they are overlooked, they risk losing all their crypto holdings to taxes, interest and penalties.”
