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Biden signs executive order on digital assets; Bitcoin sees an immediate surge

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Cryptocurrency had a big day on Wednesday, March 9, when President Joe Biden signed an executive order mobilizing the federal government to create a strategy for digital dollars. Per USA Today, the purpose behind the action is to promote innovation in cryptocurrency while reducing risk to the American people and global financial systems.

The order instructs the Federal Reserve to potentially develop its own digital currency, similar to the crypto, which has become an asset for numerous people in recent years. Under this executive order, the Treasury Department is instructed to develop guidelines for American use and trading of cryptocurrency to avoid fraud or volatility. The Treasury has the added responsibility of researching cryptocurrency and blockchain technology in payment systems. The Commerce Department will ensure the dollar and American finance remains central to global trade and business.

In a statement released on Wednesday, National Economic Council director Brian Deese and President Biden’s national security advisor Jake Sullivan described the executive order as “Fundamentally, an American approach to digital assets is one that encourages innovation but mitigates the risks to consumers, investors, and businesses, broader financial stability, and the environment.”

The Economic Times reported a surge in cryptocurrency prices on Wednesday after the executive order was signed. Investors expected this to occur as the order expands the adoption of digital currency into the U.S. financial system. The Bitfinex Trading Team noted, “The market has clearly been heartened by talk of supporting responsible innovation and a constructive approach to regulating the evolving digital token economy.”

Following the announcement of the order, Bitcoin rose 9% to $42,260 and was on track for its most significant increase since February 28. Ether, the cryptocurrency linked to the Ethereum blockchain, increased 6.2% to $2,737—its best day this month. U.S. exchange-traded funds (ETFs), which track bitcoin futures, also increased with ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF seeing jumps of 9.6% and 9.7%, respectively. U.S.-based crypto miners also saw growth. Riot Blockchain increased 10.6%, Marathon Digital Holdings grew by 11.3%, and Coinbase Global Inc jumped 8.2%.

However, it is to be noted that this executive order does also call for caution in entering a famously dynamic industry. Ed Hindi, the chief investment officer at Switzerland-based Tyr Capital Partners, commented, “We don’t want to see too many regulations too fast—we want regulations, but we want a steady hand doing it. The SEC (Securities and Exchange Commission) will be the leader in my opinion on (global) regulations.”

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