Bitcoin’s rally over the weekend caused the crypto market cap to exceed $2 trillion for the first time since mid-may, according to data from CoinMarketCap.
Over the weekend Bitcoin climbed to $48,000, reflecting a wave of renewed optimism following a summer of regulatory scrutiny causing the coin’s value to drop below $30,000 in June and July, after achieving a record high of over $64,000 in April. This was partly spurred by Elon Musk’s tweet confirming that Tesla would no longer take Bitcoin as payment due to the environmental impact of mining. Although, the electric car founder did recently state that the company will likely restart accepting Bitcoin once it conducts due diligence on the amount of renewable energy used to mine the currency.
Another big hit came from the on-going crypto crackdown in Hong Kong, limiting crypto trading to professional investors, those with $1m of liquid assets, not including digital currencies. Exchanges will also have to be licensed in the same way as asset management houses that deal in securities. As such, incoming regulations threaten to push investors towards trading crypto via offshore exchanges or risky peer-to-peer deals, like what is happening in mainland China, where bitcoin mining centres were forced to shut down and leave.
Vijay Ayyar, head of business development at cryptocurrency exchange Luno, believes that the Bitcoin price surge is “the result of a massive accumulation” when bitcoin was trading around $29,000 to $30,000.”
The crypto community suffered another blow last week as the U.S. Senate passed a $1 trillion infrastructure bill with no amendments on crypto tax. Crypto advocates worry that without adjustment, this provision will stifle crypto innovation in the U.S. and push business overseas since it would potentially cause confusion and set up reporting expectations that are unable to be fulfilled.
Speaking about the disappointing Senate results, Jehan Chu founder of cryptocurrency-focused venture capital and trading firm Kenetic Capital said that while bitcoin may surge to $55,000, investors should expect a “significant pullback to sub-$30,000 levels, resetting the stage for a long steady march” to $100,000 in 2022.
NYDIG Global Head of Research Greg Cipolaro wrote that:
The price of Bitcoin was surprisingly resilient in the wake of the news. We interpreted this price action as extremely bullish and we think the recognition of the crypto industry by lawmakers was ultimately a legitimizing event, one that should give investors comfort that this industry is here to stay.”
This news comes after earlier this month, hackers stole $600 million from the DeFi platform Poly Network however in a bizarre turn of events the funds were later returned with the hacker claiming the theft was done ‘just for fun’. In response, Poly Network announced it will launch a $500,000 bug bounty program to prevent future hacks.
The past week has also seen Ether and Binance coin soar more than 20% apiece. While Ada, the cryptocurrency built on the blockchain platform Cardano rallied to its highest value in nearly three months, following its smart contracts announcement.
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