After continued downfalls in the cryptocurrency sector, policymakers in Washington, D.C., have turned hostile on crypto, and many fear an oncoming crypto crackdown.
Key Details
- Cryptocurrencies are very volatile, and between the major falls of different coins last summer and the downfall of FTX, policymakers have turned hostile on crypto.
- The White House has been declining many different businesses associated with cryptocurrencies suggesting that a crypto crackdown could soon be on the way.
- The crypto-friendly bank Custodia was denied its request to join the Federal Bank after the company believed it would be accepted. The Fed also warned banks that they will need permission to do anything crypto-related.
Why it’s important
Cryptocurrencies are a relatively new market that has had a rough time in the last year.
The currencies exploded during the pandemic, with many investors putting large amounts of money into the market, but the sector has faced many challenges and downfalls with little regulation leading Washington to turn hostile on the coins.
It seems as if national policymakers have recently turned cold on crypto as the Fed denied a crypto-friendly bank and warned all banks that they will need permission to do anything crypto-related. The changes have others fearing that a crypto crackdown could soon come into play.
Bitcoin had a surprising rally last month, taking its price higher than it was before the crypto winter. The coin reached a high of $60,000 in November 2021 but has mainly stayed below $17,000 since the collapse of FTX in early November, which crashed the entire cryptocurrency market.
If the crypto crackdown from Washington does see through, many investors believe the current Bitcoin rally and any other surges will end.
