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What is the Effect of Biden’s Decree on Cryptocurrency?

Expected since the beginning of his mandate, the decree of the American president concerning digital assets has just been signed. Financial inclusion, consumer protection, central bank digital currency and many other topics are covered. Many themes for few concrete measures. 

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The news on crypto regulations has been rich in recent weeks and is probably partly due to the war in Ukraine. While the MiCA bill must be voted on next week in Europe, the American president has just signed a decree valid on American soil. Let’s see together the content of it and its impact on the crypto market.

A (Too) Evasive Decree?

 

Executive orders or other bills are often greeted with fear by crypto markets. But within the framework of the Biden decree, it is clear that few concrete measures are announced. This decree nevertheless seeks to transmit a vision and a philosophy on themes such as:

  • User protection (consumers and investors)
  • The fight against money laundering linked to digital assets
  • Financial inclusion of the most precarious households
  • Central bank currencies (CBDC)

 

If the decree seeks to point the finger at the responsible aspect of digital assets, no restriction is to be put forward on the most consuming protocols. Thus, unlike MiCA, which initially seemed to oppose mining and Proof of Work protocols, Joe Biden’s decree does not point out this problem.

American Leadership At The Forefront Of The Executive Order

 

Aware that the crypto sector has not yet expressed its full potential, the American president puts the ambitions of American leadership at the heart of the decree. From a concrete point of view, the president asks his government to support the sector. The objective is to maintain or even increase the influence of the United States in terms of crypto. To this end, the Department of Commerce is entrusted with the task of improving the country’s competitiveness in the sector. If the bodies are solicited, the means of implementing policies remain particularly elusive, when they are not absent.

Let us recall in passing that after the eviction of miners in China, the United States is today the world’s leading center for Bitcoin mining. A position of dominance that Joe Biden probably intends to grow.

What Impact On The Crypto Market?

 

The issue of regulation has often been referred to as a sword of Damocles above the crypto market. If today it seems impossible to envisage outright bans on the crypto market, the uncertainty of regulatory measures still hovers. A fortiori in this very tense global geopolitical context like the one we know. A context in which some observers see digital assets as a possible tool for Russia to circumvent sanctions.

Signed two days ago, this decree has had a strong positive impact on the crypto market. But the next day, the market abandoned the 5% it had taken the day before. A correction partly due to the fact that the measures are still too imprecise. The following graph shows the price of Bitcoin over the last 3 days. Graphically we can see that the mother of cryptocurrencies has almost completely erased the gain of the day before. An observation that can also be made on the main altcoins such as Ethereum or Cardano.

What impact on the crypto market?
After flirting with $42,500, Bitcoin price quickly recovered to a price level below 40,000.

In the longer term, the decree could have a positive impact on the crypto market. In any case, it seems to set the course for a policy based on consensus rather than prohibition.

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