November wasn’t the best month for the cryptocurrencyA digital currency running on a blockchain and built with cryptography. Contrary to central-bank issued currency, cryptocurrency issuance rules are... market, but that may be about to change. Now, BitcoinBitcoin is the first decentralized digital currency. It was created in 2009, by an anonymous founder or group of founders... More (BTCAn abbreviation for Bitcoin.) increases again after some positive announcements in the United States and Brazil. The first cryptocurrency touched $17,000 again, rising by over 3% during the last week. For its part, the total crypto market cap also increased by 2.7% in the same period [CMC].
Last Wednesday, US Federal Reserve Chairman Jerome Powell confirmed that they’d apply smaller interest rates from December. Apparently, the previous increases this year have helped to reduce inflation, but there’s still a way to go. As he explained:
“Despite some promising developments, we have a long way to go in restoring price stability (…) it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.”
As a result of this data, stock markets and cryptocurrencies have taken the bullish way once more. However, the FTX scandal in the crypto market will take some time to heal. Likely because of it, according to Glassnode, we have now 78% of Bitcoin’s total circulating supply in the illiquid form.
That means most users are keeping their BTCs safely inside their wallets and personal devices, instead of relinquishing custody to a centralized exchange. The holders aren’t selling these days, accumulating for better times. That’s undoubtedly a nice move for Bitcoin to increase in the long term.
Brazil is legalizing Bitcoin while increases
Just recently, Brazil’s lower house of Congress passed a long-awaited bill to legalize crypto payments in the country. This doesn’t automatically mean “legal tender” as it happened in El Salvador last year. Nevertheless, the crypto bill will enable banks to start offering services for the industry and provide adequate protection for investors.
Crypto exchanges will need to get a license to operate in the territory, assuring some level of trust for users. Besides, crypto scams have been added to the national Criminal Code, so the offenders would officially get fines and prison in these cases. The current president, Jair Bolsonaro, has two weeks from now to pass or reject this legislation. If he doesn’t provide any answer, then the law would be tacitly approved and would enter into force immediately.
Meanwhile, in Europe, the law Markets in Crypto Assets (MiCA) could be brought forward by recent events in the crypto market and arrive in 2023. The disaster of the crypto exchange FTX has been a wake-up call for regulators globally, and now they’re paying more attention than ever to their budding crypto laws. Even if Bitcoin and the whole crypto market increase, we can expect more regulations ahead.
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