- Bitcoin, the most valuable cryptocurrency in the world, was languishing at below $40k, and had already fallen by around 10% in the last week.
- After the executive order issued by the US president, cryptocurrencies lost almost everything they had gained over the previous days.
A day after United States President Joe Biden issued the executive order directing assessment into the risks of digital assets and announcing the launch of the digital dollar, the cryptocurrency markets experienced a fall once again despite the brief recovery seen earlier in the week.
Cryptocurrencies have seen volatile behavior in the last three weeks. Though every token has had bad days, on Thursday 10th the decline was clear cut across the board, from BTC to the Qtum token which ranks 100th in the rankings of top cryptos by market cap.
Most of the cryptocurrencies had briefly perked up, despite having accumulated heavy losses for weeks, recording a recovery of approximately 10% the day before the reveal.
Biden’s announcement on the regulation of cryptocurrencies, and the order to accelerate the issuance of the digital dollar which will compete with the Chinese yuan, has since had a strong impact on the price of cryptocurrencies.
The central bank digital currency (CBCD), which is expected to be issued sooner than initially planned, would be backed by the U.S. Federal Reserve, and would enter into direct competition with all private cryptocurrencies, including stablecoins.
BTC Loses Everything Gained from the Previous Days
In the days leading up to the executive order, cryptocurrencies had been gaining ground, thanks in part to the war in Ukraine as both Russians and Ukrainians have been using cryptocurrencies to finance their war spending. While Ukraine is receiving donations in both fiat and crypto from the entire world, Russia is reportedly using digital assets to cover itself after the financial embargo of its assets set by the West.
On Thursday morning, Bitcoin fell back to the $40,000 band, thus erasing all gains from the previous days, especially those of Wednesday when Biden’s plans were made known. At 9:51 a.m. (ET) BTC had negative variation of 7.27%, and its price was hovering at $38,824.
"Although the initial reaction to Biden's digital assets executive order was 'it's not as bad as it could have been,' a closer look at the details shows that it does not eliminate potential regulatory risk," said senior market analyst at Oanda Asia-Pacific, Jeffrey Halley, speaking to Bloomberg.