Crypto markets lose $100 billion as Biden signs executive order on digital assets
Bitcoin drops below $40K again after Biden's crypto executive order is signed into law.
A buy the rumor, sell the news event is in full swing today as the price of Bitcoin fell 8% in five hours following Biden’s signing of an executive order on crypto assets. The markets reacted positively to the buzz of the impending crypto executive order following a leaked statement from U.S. Treasury Secretary nominee Janet Yellen. She acknowledged the potential benefits of crypto. However, as Biden signed the order, the markets have given up their gains to put Bitcoin back below $40k again for the sixth time in as many days as they remain volatile.
What is in the Crypto Executive Order?
The order is officially titled the ‘Executive Order on Ensuring Responsible Development of Digital Assets’. The focus of which is to:
- Protect U.S. Consumers, Investors, and Businesses
- Protect the U.S. and Global Financial Stability and Mitigate Systemic Risk
- Mitigate the Illicit Finance and National Security Risks Posed by the Illicit Use of Digital Assets
- Promote U.S. Leadership in Technology and Economic Competitiveness to Reinforce U.S. Leadership in the Global Financial System
- Promote Equitable Access to Safe and Affordable Financial Services
- Support Technological Advances and Ensure Responsible Development and Use of Digital Assets
- Explore a U.S. Central Bank Digital Currency (CBDC)
Anyone can read and download the document in full in the white house briefing room.
Initial industry reaction
Following the release, Chief Policy Officer for Coinbase, Faryar Shirzad, tweeted:
“The White House seems to understand and embrace the transformational potential of digital asset technology, and the importance of maintaining American leadership.”
Shirzad’s is an interesting take from someone directly involved in crypto. However, we should probably note that Coinbase is a U.S. company listed on the US Stock Exchange. It could be argued that ‘maintaining American leadership’ also means retaining market share for companies like Coinbase. In a world of open-source, decentralized technology, there is still a place for leadership. For instance, projects such as Ethereum still look to Vitalik Buterin for direction.
Interestingly, Ripple CEO Brad Carlinghouse, who has battled the regulatory bodies for years, commented:
Like many of you, I thought the Biden Admin’s EO would acknowledge crypto, but not detail specifics on next steps for regulation. However, I was pleasantly surprised & inspired by the EO acknowledging the *need* for evolution and alignment of the govt’s approach to crypto.
— Brad Garlinghouse (@bgarlinghouse) March 9, 2022
It may come as a relief to Garlinghouse and other crypto projects to finally have a playbook by which to establish their regulatory moves. However, the question of whether the U.S. is going to attempt to overstep the mark has markets worried.
Crypto investor, Anthony Pompliano, believes that the order signifies the intent of the U.S. to become the leader in the new digital financial system, citing ‘that citizens are the ultimate winners here.’ It is hard to argue with this point because it is written directly in the fact sheet. Section 2.d) of the actual document states:
“We must reinforce United States leadership in the global financial system and in technological and economic competitiveness, including through the responsible development of payment innovations and digital assets.”
Are the U.S. worried that a decentralized financial landscape could leave them in the dust? It will be interesting to see the outcomes of the research, frameworks, coordinated action and policy assessments that have been put into motion following the execution of this order. Crypto, by definition, is not an industry that any single nation can control. That is one of the main reasons for its creation.