- Bitcoin price would largely benefit from set rules and regulations; however, support from the government is still weak.
- The bills floated by Senators both contain imperfections of some nature but have been supported by crypto industry players.
- According to Bloomberg Intelligence analyst Nathan Dean, both the bills have less than 50% odds of approval.
Bitcoin price, along with that of other cryptocurrencies, has been slow to recover since the July crash. The added lack of clarity from regulatory bodies and the government has been feeding the bearish woes that have dragged BTC to its present trading price. With the possibility of two more crypto regulation bills on the verge of rejection, this is how the future could look for the biggest digital asset in the world.
Bitcoin price may not hike anytime soon
Speaking purely from the regulatory standpoint, no clear set of regulations might be harmful to Bitcoin price. As is, the cryptocurrency has been stuck around $25,000 and $26,000 for the past three weeks, with a spike on August 28 that was washed away in the following 48 hours.
BTC/USD 12-hour chart
Without the support of institutions, a rise is difficult, and the large wallet holders might keep away until there is some clarity on whether their participation may or may not backfire.
The state of crypto regulation in the United States has been a matter of discourse for a long time now. The Securities and Exchange Commission presently takes the most actions against crypto service providers. However, over time, other agencies like the Commodity Futures Trading Commission (CFTC) have also stepped in.
To minimize the confusion, two separate bills – Financial Innovation and Technology for the 21st Century Act and the Responsible Financial Innovation Act of 2023 – have been floated in the US Congress. But by the looks of it, both the bills might be rejected as their odds of passing are below 50%.
The reason in both cases is the lack of Senate support, which might keep them from seeing the light of day.
Both the bills have shortcomings, too. While the first bill gives more power to the SEC, the second bill would lead to a new process of registration for crypto exchanges. The Responsible Financial Innovation Act of 2023 also would label crypto tokens as “digital commodities”.
These reasons might be key factors in their potential rejection in Congress.
Impact on BTC and other assets
This might result in a longer time for Bitcoin price recovery as bearish developments in the regulatory space translate to trouble for investors. The need for regulation in the past has been emphasized by many, including important industry players.
If we want to be taken seriously as a nation, we have to act seriously as a nation. This legislation would finally put the US into the global conversation on digital asset regulation. Congress should enact this without delay. https://t.co/zFkN87npMm
— paulgrewal.eth (@iampaulgrewal) July 20, 2023
The market could attract more investors and service providers if there is clarity, as noted in the European Union. Markets in Crypto Asset (MiCA) were widely praised, and their acceptance set a precedent. Unless the United States (one of the biggest crypto markets in the world) follows this precedent, Bitcoin price is vulnerable to facing a delay in recovery, in addition to other factors.
Nevertheless, Nathan Dean, Senior analyst at Bloomberg Intelligence, stated,
“I’m more optimistic about stablecoin legislation passing next year. The major hold-up on non-bank issuers, I think can get resolved and there’s a regulatory gap that needs filling. Guessing Feb-June 2024ish. (sic)”
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