On Tuesday night, the total market value of cryptocurrencies increased by $130 million. If you're wondering who to thank for this, U.S. Treasury Secretary Janet Yellen would be a surprise. She or anyone else leaked her statement about Biden's new executive order on digital assets a day early.
Someone tried to pull Yellen's statement from the Internet almost as soon as it arrived, and the publishers immediately realized the mistake. Of course, they weren't fast enough to stop the public from paying attention to the statement in the article, which suggested that the executive order would "deliver substantial benefits to the country, consumers, and businesses" by supporting "responsible innovation. (Barrons)
The executive order itself, issued and signed by President Biden on Wednesday, is described as "the first government-wide approach to addressing the risks and potential benefits of leveraging digital assets and their underlying technologies. The fact sheet you can read here paints a clear picture of regulation that seems both thoughtful and hopeful, with a focus on protecting consumers, fostering innovation and exploring the potential of CBDC. Ultimately, the government appears to be moving beyond the field, recognizing the rapid growth of cryptocurrencies among the American people and recognizing the need to be a leader in the digital asset space.
After months of waiting for any sort of regulatory framework for cryptocurrencies in a rapidly expanding economy, the order's recognition of the need for an evolving stance on cryptocurrencies is a godsend. With the CPI set to reach 7.9% in the coming months, a recent LendingClub study shows that as many as 64% of Americans have been living paycheck to paycheck since January 2022. Wage growth indicators are not keeping pace with rising inflation, leaving citizens high and dry.
Anuj Nayar, LendingClub's financial wellness officer, addressed the causality behind the reported data, saying, "We're all seeing the cost of everything spike …… you have to eat, you have to commute; these are not discretionary expenses. " Nayar echoes the sentiment of a nation where gas prices in some states are reaching $6 or more. It's so expensive that people are making emojis about it, comparing the price to the imaginary price of the post-apocalyptic movie I Am Legend. (CNBC)
With all of this in mind, it is not surprising that citizens found reason to be pleased with Secretary Yellen's leaked statement and hopeful message. In the final paragraph, Yellen's statement touches on concepts rooted in the core values of cryptocurrencies, including promoting "a fairer, more inclusive, and more efficient financial system, while combating illicit finance and preventing risks to financial stability and national security in our ongoing fight against it." Equality and de-trusted security – what could be more blockchain than that? (U.S. Department of the Treasury)
In a separate but related note, the U.S. Treasury Department also announced plans to educate the country on cryptocurrencies through a new education division. The plan is being driven by a team of 20 different agencies, including the Securities and Exchange Commission, all of which will work to implement the efforts. Deputy Treasury Secretary for Domestic Finance Nellie Liang acknowledged that more education "would help.
As with anything else, education is critical in order to maximize accessibility and ensure secure adoption practices. "We are hearing more and more investors and households buying cryptocurrency assets," said Liang, "and we recognize the complexity of how some of these assets work." The Treasury Department hopes to promote cryptocurrency inclusion by helping to mitigate this complexity and providing investors with the foundational knowledge they need to participate in the financial future, while still protecting less savvy investors. (JTA)
All of this should keep Bitcoin busy for a while, but investors are keeping a close eye on the K-line charts to see how high the asset can climb around the news. Either way, cottage coins continue to benefit from the bitcoin rally, keeping the market up and to the right for many assets. This momentum is supported by new and exciting cryptocurrency projects designed to support spaces like the Metaverse and Web3, such as Avalanche's Multiverse Program and Cake DeFi Ventures' $100 million venture capital arm, which focuses on "investing across the Web3, Metaverse, NFT spaces, gaming, eSports and FinTech spaces." (The Associated Press)
With the addition of the government, cryptocurrencies are turning an exciting new chapter in U.S. history. It's hard not to feel excitement and anticipation when reading the details of the order, as it feels like a turning point. As a nation, we are finally getting the resources we need to maximize the economic potential of cryptocurrencies. For those waiting with bated breath for the new CPI data, this should be a reason to rejoice. As bright as the future of cryptocurrency is, the promise of national leadership and innovation in the space will only make it brighter.
Key Market Drivers as of March 11, 2022
- Waves (WAVES) +34.6%
- Zcash (ZEC) +28.5%
- Icon (ICX) +21%
- Horizons (Zen) +8.6%
Coindesk > "10M Ether Now Locked to Eth 2.0 Pledge Contract"
Cointelegraph > "The Great Manzi: From 16-Year-Old Millionaire to Incredible IoT Inventor"
Blockworks > "Will Biden's Executive Order Accelerate Approval of Spot Bitcoin ETFs?"
Cointelegraph > "White-handed wealth more likely to flow into cryptocurrencies than inherited: report"
Voyager Cryptocurrency Risk Disclosure
All trading in digital assets involves risk, and the past performance of digital assets or other financial products is no guarantee of future results or returns. Cryptocurrencies are inherently highly speculative, involve a high degree of risk, and can depreciate rapidly and significantly in value. The value of cryptocurrencies has the potential to fall to zero or near zero. While diversification may help to decentralize risk, it does not guarantee profits or protect against losses. Traders should carefully consider their objectives and risks before trading. Previous gains may not be representative of other clients' experiences and are no guarantee of future performance or success.