Bitcoin is doing well to hold up after negative news surrounding regulation of cryptocurrencies. The first was a growing attack on the Binance exchange by G7 countries. The UK’s Financial Conduct Authority (FCA) warned on Saturday that Binance shouldn’t be operating in the country. The news came just a day after Japan’s financial regulator issued a similar warning to the cryptocurrency exchange.
Another negative headline came from a senior U.S. Federal Reserve official, who said that Tether’s USDT stablecoin is a risk to the stability of the financial system.
“I do think we need to think more broadly about what could disrupt short term credit markets over time, and certainly stablecoins are one element,” Rosengren said. “I do worry that the stablecoin market that is currently, pretty much unregulated,” he added.
The latest negative sentiment over regulation is predictable and part of the ongoing move towards Central Bank Digital Currencies (CBDCs). Governments do not want to cede control of the money supply to decentralized organizations, especially at a time when the financial system is stressed with huge stimulus measures and rising inflation.
Bitcoin could move higher this week and the fact that the coin is seeing gains with bad news is a positive omen. The $40k level is the resistance for Bitcoin and that could be tested this week. Litecoin could also find a bottom here around the $125 level and the first target would be $200 for the altcoin.
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