Bitcoin price has regained the $22,000 mark, but many investors are focused on imminent regulatory action against stablecoins and the Valentine’s Day CPI data.
After maintaining the $22,500 support for 20 days, the Bitcoin price eventually fell down on February 9. The expectation of bullish traders for a protracted surge has been replaced by a narrow trading range with resistance near $22,000.
The decline is even more worrying given that the S&P 500 is trading around its highest level in six months while the cryptocurrency market as a whole continues to decline.
Bitcoin’s recent underperformance may be explained by regulatory pressure, namely in the United States. The Kraken exchange signed a deal with the United States Securities and Exchange Commission (SEC) on January 9 to cease selling staking services to U.S. customers. The cryptocurrency exchange company agreed to pay $30 million in disgorgement, prejudgment interest, and civil penalties.
The crypto lending company Nexo Capital stated on February 10 that its Earn Interest offering for U.S. clients will be discontinued in April. Nexo cited their $45 million settlement with the SEC and other agencies as the cause for the service suspension on January 19.
Gary Gensler, chairman of the U.S. Securities and Exchange Commission, issued a warning to crypto businesses on January 10 to “come in and respect the rules,” stating that their business models were “rife with conflict” and that they needed to “disentangle” bundled goods. According to Gensler, such businesses must register with the SEC.
On February 13, Paxos Trust Company announced the end of its contract with Binance for the branded U.S. dollar-pegged stablecoin BUSD in the midst of an ongoing investigation by New York state authorities.
The U.S. will release January’s Consumer Price Index data on February 14, which will indicate if price rises have slowed after the central bank’s interest rate hikes. Typically, lower inflation rates would be cause for celebration since they lessen the burden on the U.S. Federal Reserve to regulate the economy. On the other hand, declining consumer demand is anticipated to put pressure on business profitability, which might aggravate the recessionary climate.
Also Read: Paxos clearly disagrees with the SEC’s classification of BUSD as a security