Bitcoin and cryptocurrency prices have crashed over the past week with around $1.4 trillion wiped from the combined crypto market—and sparking warnings of a new “crypto winter.”
The bitcoin price dropped under $33,000 per bitcoin this week, down more than 50% from its November peak. Ethereum, the second-largest cryptocurrency by value, has crashed to $2,300 per ether, down from almost $5,000 late last year (amid serious ethereum price warnings).
Now, reports have emerged the White House is gearing up to issue a cryptocurrency executive order—with president Joe Biden reportedly set to ask federal agencies to determine crypto risks and opportunities.
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U.S. president Joe Biden could sign a crypto industry executive order as soon as next month, … [+]
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The executive order, which could be signed by Biden as soon as next month, would “put the White House at the center of Washington’s efforts to deal with cryptocurrencies,” it was reported by Bloomberg, citing anonymous sources familiar with the matter.
The executive order is expected to outline economic, regulatory and national security challenges posed by cryptocurrencies and would call for reports from various agencies due in the second half of 2022—potentially looking at the systemic risks of cryptocurrencies and their illicit uses.
“U.S. president Biden is readying an executive order that will outline a comprehensive government strategy around cryptocurrencies and will ask Federal agencies to determine their risks and opportunities,” analysts at digital asset market maker GSR wrote in a market update, warning that bitcoin and ethereum’s “weak performance has been attributed to a general sell-off in risk assets.”
“Other items causing investor concern include rising inflation and central bank policy accommodation removal, mounting speculation that Russia may invade Ukraine, omicron worries, and supply chain disruptions.”
Government agencies and regulators have been struggling to get a handle on the fast-growing crypto market over the last year, with the Office of the Comptroller of the Currency (OCC), the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) all attempting to direct how different aspects of the crypto industry should comply with federal law.
Last year, SEC chair Gary Gensler called on Congress to give the agency more authority to better police cryptocurrency trading.
“[Crypto] is rife with fraud, scams and abuse in certain applications,” Gensler said in August. “We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks.”
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The bitcoin price has dropped almost 30% over the last month amid a broader crypto crash that’s hit … [+]
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Meanwhile, executives from the burgeoning crypto industry have railed against a lack of regulatory clarity and have warned the U.S. risks falling behind other countries when it comes to crypto and blockchain adoption as a result. In October, major U.S. bitcoin and crypto exchange Coinbase was among crypto companies that called on the U.S. to create a new regulator to oversee digital asset markets.
“My concern is that entrepreneurs and businesses have little visibility into what regulators expect of us,” Coinbase chief executive Brian Armstrong wrote in an op-ed published by the Wall Street Journal late last year. “The positions regulators take often aren’t applied in ways that seem consistent or equitable.”
The extreme volatility on crypto markets, with both bitcoin and ethereum bouncing along with stock markets this week after a huge crypto crash, has piled pressure on regulators to act in order to protect investors.
“Consumer protection will be the major regulatory focus issue of 2022, and consumer protection authorities will become major forces shaping the crypto space,” researchers at London-based blockchain analysis company Elliptic wrote in a report out last week.
Last week, Russia’s central bank called on the country to follow in China’s footsteps and ban bitcoin, ethereum and other cryptocurrencies, citing threats to financial stability, citizens’ wellbeing and its monetary policy sovereignty.
