What’s Going On with the Crypto Market?

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At the time of publishing, Bitcoin is close to US$59, 000 and Ether around US$4, 100.

According to CNBC, Bitcoin’s all time high of US$68, 990.90 was recorded on 10th November. In the days that followed, it has since dropped around US$10, 000. With reference to CoinDesk, Ether hit its all time high of slightly over US$4, 800 earlier in the month as well. But along with much of the crypto market, it has also seen a drop in the past couple of days. This includes the popular meme coin, Shiba, which hit a record high of US$0.000088 in late October but is now hovering around US$0.000048.

The decline in the general crypto market was thought to be attributed to the US$1.2 trillion bipartisan infrastructure bill that was signed by the US President Joe Biden on Monday. As reported on Next Advisor, “The new law will require brokers – aka cryptocurrency exchanges – to issue a 1099-B. In other words, crypto exchanges will now be required to notify the IRS directly of crypto transactions.” This new legislation has caused some major concerns amongst crypto investors, mainly with reference to the tax reporting department.

Apart from the signed US bill making waves in the crypto market, China’s continued crack down on the crypto industry is likely another swaying factor. China’s President Xi Jinping had previously mentioned China’s goal of achieving carbon neutrality by the year 2060. One of the steps to reaching that goal involves taking a stronger stance against crypto mining in the country. The mining process uses a lot of energy and causes carbon emission while creating new coins and logging all transactions of current coins.

In a press conference on Tuesday, a spokesperson of China’s state planner, the National Development and Reform Commission (NDRC) spoke in Mandarin and was translated by CNBC to the following, “Regulating cryptocurrency mining activities has significant meaning in optimizing our industrial structure, saving energy and cutting emission, achieving carbon emission and neutrality goals.” The NDRC is also considering imposing “punitive electricity prices” towards those mining crypto at a residential electricity price.

In a Bloomberg article published today, Binance CEO has said the following with regards to his thoughts on China, “I don’t think there’s anything to be done in China right now from a blockchain industry perspective. The actual restrictions, the actual block is much stronger this time than in 2017. In 2017, Binance.com the website was blocked by the Chinese firewall. This time around, in the last couple years or so, even SMS messages to Chinese mobile numbers, like the two-factor verification codes, do not get through. E-mail verification to any of the Chinese e-mail software providers gets blocked. There’s really not an easy way, the blocks are very complete, very effective. So I don’t see any way that China users can continue to use crypto platforms like us in any reasonable fashion. I also don’t see the policies changing in the short term.

Despite everything, cryptocurrency continues to get more mainstream in many parts of the world. Non-fungible tokens (NFTs) are growing in popularity, with some sky rocketing in value. It is slowly but surely becoming a presence that can’t be ignored and undeniably, a part of the future.

Top Photo by Executium on Unsplash

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