The collapse of FTX and subsequent requires more durable regulation by the likes of U.S. Senator Elizabeth Warren have elevated the probability of regulators adopting even stricter crypto legal guidelines. In Africa, crypto trade contributors warn of the unintended penalties arising from rushed and over-restrictive laws.
Because the crypto trade continues to grapple with the ramifications of FTX’s collapse and the ensuing lack of belief, regulators have been fast to make use of this incident to help their name for extra stringent laws. Opponents of bitcoin and decentralized digital property like U.S. Senator Elizabeth Warren have blasted regulators for permitting entities equivalent to FTX to function outdoors regulation.
Compounding issues for crypto fans who could wish to foyer towards damaging laws is the impression that crypto entrepreneurs aren’t sure or guided by any identified code of conduct. Critics of the trade imagine this lack of guidelines or ethics is what motivates scammers, and people with an insatiable want for high-risk trades, to experiment with buyer funds.
But, when these experiments and gambles fail to repay, the traders usually lose every thing whereas the culprits like Sam Bankman-Fried — founder and CEO of FTX — play the online game Storybook Brawl which he says helps him to “unwind a bit.”
Many within the crypto trade now concern the collapse of FTX will see regulators around the globe use this as a pretext for putting in more durable regulatory regimes which can stifle innovation.
In Africa, the place FTX had a minimal footprint, commenters imagine regulators there are seemingly to make use of the crypto alternate’s collapse as justification for refusing to manage or for banning crypto entities altogether. This can be regardless of crypto property’ game-changing position in Africa’s remittances and cross-border funds area.
To know the African crypto and blockchain trade’s perspective, Bitcoin.com Information spoke to a number of trade contributors from the continent together with Senator Ihenyen, the president of the Nigerian foyer group Stakeholders in Blockchain Know-how Affiliation of Nigeria (SIBAN). Ihenyen stated it’s appropriate to imagine that the worldwide crypto trade is headed for an period that’s characterised by even more durable regulation, and extra skeptical governments.
Nonetheless, Ihenyen stated whereas it’s comprehensible that politicians like Warren might want more durable regulation, he reckons that this might not be the most effective method. He defined:
Somewhat, as I’ve continued to advocate, regulators have to reimagine the position of regulation in at this time’s more and more decentralized financial system.
As a substitute of introducing more durable legal guidelines, the SIBAN boss stated it could be greatest if the U.S. Congress, the U.S. Securities and Trade Fee (SEC), and different regulators had been to think about regulatory “frameworks that encourage and require accountability, safety, and transparency within the crypto market.”
Regarding how any more durable regulation of the crypto trade by the U.S. authorities will have an effect on trade gamers in Africa, Ihenyen stated there are prone to be two outcomes. The primary final result is the drying up of enterprise capital funding “for crypto tasks, notably exchanges and token-based platforms.” The second seemingly final result can be that of U.S. and European Union-based traders “changing into extra involved in exploring alternatives in Africa’s fast-growing retail crypto market.”
Rume Ophi, a crypto fanatic and educator, instructed Bitcoin.com Information that the collapse of FTX had hit very near house and that his personal training efforts have been affected. Whereas he stated he sympathizes with affected customers, Ophi notes regulators shouldn’t use this to justify imposing stricter regulation as this may create different issues.
“Stricter regulation will solely promote cash laundering,” Ophi argued.
One other trade voice from Africa, Nathaniel Luz, a Nigeria-based crypto advocate and creator of the guide titled “Bitcoin is Money,” concurred that the U.S. regulators are actually beneath elevated stress to reply. Nonetheless, simply as he has argued in his guide, Luz instructed Bitccoin.com Information that since Africans see cryptocurrencies like BTC otherwise from Westerners, any regulatory response have to be cognizant of this reality. He defined:
Whereas bitcoin is a luxurious for the West, it’s a lifeline for Africans. For them, it’s simply one other asset or inventory however for us, it’s a monetary lifeline.
In the meantime, of their joint response to questions despatched by Bitcoin.com Information, Daniel Mulondo and Killian Mugenyi, the co-founders of the crypto academy Nileone, suggested regulators to make the most of the state of affairs to interact with all stakeholders together with educators. To crypto critics utilizing the FTX collapse as fodder, Mulondo and Mugenyi stated:
Has something basically modified relating to the expertise? The reply is not any. It is a failure of a centralized entity, an alternate. It has sadly tarnished the trade and little question delayed adoption.
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On-chain data shows the cryptocurrency traders have hit the snooze button as Bitcoin and other assets have witnessed a plunge in volume.
According to data from the on-chain analytics firm Santiment, trading volume has seen a slowdown in the cryptocurrency sector during the past week.
The “trading volume” here refers to an indicator that keeps track of the total amount of a given asset that’s becoming involved in trading activities on the major exchanges. When the value of this metric goes up, it means the investors are participating in a higher amount of activity related to the coin. Such a trend implies interest in the asset is on the rise.
On the other hand, the indicator observing a decline suggests the traders may be starting to put their attention elsewhere as they are taking part in a lower amount of activity.
Now, here is a chart that shows the trend in the combined Bitcoin trading volume for four different segments of the digital asset sector:
The value of the metric appears to have gone through a decline for all of these groups | Source: Santiment on X
In the above graph, the four sides or segments of the cryptocurrency market displayed are: Memecoins Top 6, AI & Big Data Top 6, Layer 1 Top 6, and Layer 2 Top 6.
“Layer 1” assets refer to those that circulate on blockchains that handle their own security and aren’t built on top of another ecosystem. Bitcoin and Ethereum are the most prominent examples of coins of this type. The coins that aren’t on primary networks, like Polygon (MATIC) and Arbitrum (ARB), are termed Layer 2.
From the chart, it’s apparent that the six largest coins for both of these categories have seen a sharp decline in their trading volume recently. Segments like meme-based tokens and AI-related coins have also noted cooldowns of their own at the same time.
Back in November and the first half of December, the volume was high across the market as traders made a large number of moves during the Bitcoin bull run hype. It would appear, though, that the recent bearish shift has damaged the investor morale.
After the latest continuation of the decline in the indicator, trading activity in the market has slumped to the lowest level since the 4th of November, a day before the presidential elections in the US.
Generally, the market tends to see volatility when a large number of traders are participating in trading activity, as it’s their trades that fuel price moves. Since the trading volume has slumped across the cryptocurrency sector recently, it’s possible that Bitcoin and others might see a state of calm in the near future.
The low activity may even be considered a sign that there is FUD in the market, which is something that has facilitated bottoms in the past.
At the time of writing, Bitcoin is trading at around $90,700, down almost 8% in the last week.
Looks like the price of the coin has been going down over the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com
A member of Congress disclosed buying three cryptocurrencies in December, as the sector gets ready to welcome in a pro-cryptocurrency White House administration.
What Happened: With many cryptocurrencies hitting new all-time highs after Donald Trump’s 2024 election win, members of Congress like Representative Guy Reschenthaler (R-Pa.) are adding crypto to their portfolio.
According to Benzinga’s Government Trades page for Reschenthaler, the Republican Representative disclosed the trades recently in one filing.
Here are the cryptocurrencies purchased and the dates the trades were made:
The transactions are the first disclosed by Reschenthaler since he joined Congress in 2019.
Did You Know?
Why It’s Important: Reschenthaler, 41, has not been as vocal about cryptocurrency as other members of Congress have been. The purchase could be due in part due to his belief that a Trump presidency will be bullish for the cryptocurrency sector.
Here is a look at how much the Congressman paid for the cryptocurrencies versus where the price is today:
Two of the Congressman’s purchases have lost money while the purchase of XRP has turned into a winning trade. Benzinga will closely monitor the trading activity of members of Congress when it comes to cryptocurrency in the coming months.
Last year, Reschenthaler proposed renaming the Washington Dulles International Airport, which is located 25 miles from Washington, D.C., to the Donald J. Trump International Airport.
“In my lifetime, our nation has never been greater than under the leadership of President Donald J. Trump,” Reschenthaler said at the time. “As millions of domestic and international travelers fly through the airport, there is no better symbol of freedom, prosperity, and strength than hearing ‘Welcome to Trump International Airport’ as they land on American soil.”
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HONG KONG SAR – Media OutReach Newswire – 13 January 2025 – VT Markets, an award-winning financial services provider, today releases its 2025 Q1 Economic Outlook. The report highlights how the dual tailwind of favourable policies and market dynamics will propel the cryptocurrency sector into a new era of mainstream adoption. The report also underscores the transformative strides achieved by cryptocurrencies in 2024, which sets the stage for further growth in the upcoming year.
2024 As A Landmark Year for Cryptocurrency
With the conclusion of the 2024 U.S. Presidential election, cryptocurrencies have ascended from niche assets to mainstream investment products. Political developments, particularly arising President Trump’s re-election and his pro-cryptocurrency stance, acted as the main catalyst for this phenomenon. Participants observed Bitcoin’s price surging by over 40%, crossing $108,000 by year-end anticipating dovish policy shifts and renewed investor confidence towards the digital asset.
Key regulatory appointments, such as naming crypto advocate Hester Peirce as SEC Chair, signalled to the market a shift towards a more favourable regulatory framework, instilling optimism in institutional and retail investors alike.
The Rise of Spot Bitcoin ETFs
In early 2024, the U.S. SEC approved multiple spot Bitcoin ETFs; a significant breakthrough for the cryptocurrency industry then. By year-end, assets under management for these ETFs grew from $28.8 billion to $110 billion. Among them, BlackRock’s IBIT ETF stood out, achieving record-breaking $30 billion AUM in under 300 days.
This development not only validated cryptocurrencies as a mainstream investment class but also paved the way for wider institutional participation. The integration of cryptocurrency into traditional finance is seen as a key step toward standardisation – an issue which has plagued the industry since its inception.
Liquidity and Risk Appetite Fuel Growth
Macroeconomic conditions, including the Federal Reserve’s shift towards an easing monetary policy, contributed to increased market liquidity and higher risk asset valuations. Cryptocurrencies, known for their high-risk, high-reward profile, inevitably emerged as a preferred choice for portfolio diversification, further driving their adoption and price momentum.
2025 Will Be A Year of Regulatory Clarity and Technological Innovation
Looking ahead, the cryptocurrency sector is poised for greater regulatory clarity and broader market acceptance globally:
United States: Expected legislation on stablecoins and other crypto assets will a establish a clear regulatory environment.
European Union: The upcoming implementation of the Markets in Crypto-Assets Regulation (MiCA) will enhance transparency and compliance.
Asia-Pacific: Singapore and Hong Kong are set to strengthen their positions as regional crypto hubs, promoting Web3 development and reopening licensing opportunities for exchanges.
Emerging Markets: Countries like Brazil, the UAE, Australia, and South Africa are advancing efforts to legitimize cryptocurrencies, potentially becoming regional leaders in the sector.
A New Era for Mainstream Cryptocurrency Adoption
The VT Markets’ Research Desk suggests that the confluence of supportive policies, transparent regulations, and robust market conditions will accelerate the mainstream adoption of cryptocurrencies.
They believe that this transition from speculative assets to recognised investment products will be a pivotal moment in financial innovation.
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