Bitcoin price drops after enthusiasm wears off for Biden’s crypto executive order

Bitcoin has lost almost all the ground it clawed back in a tumultuous week that saw its prices plunge dramatically overnight.

The value of bitcoin has dropped significantly overnight just a day after the blockchain clawed back lost ground.

In the last 24 hours, the top-ranked cryptocurrency plunged below the $40,000 mark, to a low of $38,000 (A$51,000), according to CoinDesk.

That’s down considerably from the day before, when BTC was trading at US$42,577 (A$58,145), representing a wipe-out of around 10 per cent.

The initial excitement of US President Joe Biden’s executive order has appears to have worn off.

On Thursday, President Biden signed off on a historic executive order on cryptocurrency, focusing on regulation and responsible ways to support future growth in the space.

This initially buoyed the crypto market, with many finding it positive, but a day later bitcoin has plummeted.

One expert said the government’s plan was “defensive” and the news coincided with the fact that US inflation is officially the worst it has been in 40 years, prompting investors to panic.

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Bitcoin dropped massively in the last 24 hours.

The executive order aims to facilitate innovation within the cryptocurrency space while also ensuring protections for consumers and investors, according to a release from US Treasury Secretary Janet Yellen.

Ms Yellen said the department would “support responsible innovation” as well as making sure to “complement” existing plans for regulations in the industry.

“Under the executive order, Treasury will partner with interagency colleagues to produce a report on the future of money and payment systems,” Ms Yellen continued.

“Because the questions raised by digital assets often have important cross-border dimensions, we’ll work with our international partners to promote robust standards and a level playing field.”

Later on, she added: “Treasury will work to promote a fairer, more inclusive, and more efficient financial system, while building on our ongoing work to counter illicit finance, and prevent risks to financial stability and national security.”

The release was endorsed by President Biden, who signed the order.

This has been a volatile week for bitcoin.

Guy Gotslak, co-founder of cryptocurrency investment platform My Digital Money, was not bullish about the proposed changes.

“The executive order is, more than anything, defensive,” he said, as reported by CNBC.

“The main goals of the EO are to protect the US’ financial position globally, make sure US regulations (both federal and global) are not circumvented using crypto, make sure crypto investors and users are protected legally, and that crypto as an industry is regulated in general,

“These are not bad; we all want the same thing.

“We want to protect investors, especially the small ones.

“But the EO does not direct the government to take proactive steps to nurture the growth of technology.”

To top that off, US inflation hit a 40 year high in February, amid soaring oil and food prices exacerbated by Russia’s invasion of Ukraine.

America’s consumer price index rose 7.9 per cent over the year to February, including a 6.6 per cent increase in petrol and a 1 per cent rise in food in a single month, as well as a 0.6 per cent surge in rent for February, the fastest monthly growth in over 20 years.

Trader and analyst Matthew Hyland warned that once the US released its inflation results, there would be a fluctuation in bitcoin’s price.

“I expect volatility ahead, but increased certainty as a result,” he wrote.

.@SecYellen's statement on @POTUS's executive order on crypto was apparently posted early. Based on remarks, crypto EO is positive and calls for "coordinated and comprehensive approach to digital asset policy" that "will support responsible innovation."https://t.co/Z1URnWGzMu

— Cameron Winklevoss (@cameron) March 9, 2022

However, others were bullish, calling the executive order “benign” and “positive”.

Marcus Sotiriou, analyst at digital asset broker GlobalBlock, wrote in an emailed note: “The order seems relatively benign, hence giving the market some clarity.

“As many investors had prepared for the downside risks of this event by waiting on the side lines, we are seeing many buy bitcoin back in what appears to be a spot-driven rally.”

Cameron Winklevoss, co-founder of the Gemini crypto exchange, said the executive order was overwhelmingly “positive”.

“Based on remarks, crypto [executive order] is positive and calls for co-ordinated and comprehensive approach to digital asset policy that will support responsible innovation,” he wrote on Twitter.

“I applaud this constructive approach to thoughtful crypto regulation and look forward to working together with the various stakeholders to ensure that the US remains a leader in crypto,” he added.