Crypto Price Check: Bank of England Action Could Affect Bitcoin: Analyst
Bank of England’s move to carry out emergency purchases of U.K. government bonds ‘could have interesting outcomes for bitcoin,’ an analyst says.
The Bank of England's surprise move could have implications for the world's largest cryptocurrency, a crypto analyst said.
The stock market rallied in the previous session after the U.K.'s central bank said it would carry out emergency purchases of U.K. government bonds in an effort to restore “orderly market conditions” amid a historic slide for the pound.
James Edwards, crypto specialist with Finder, said the bank's decision “could have interesting outcomes for bitcoin.”
'A New Opportunity for Bitcoin'
“If the policy is extended, or other nations follow suit, it could see renewed interest in [bitcoin,] which largely benefitted from aggressive money-printing policies throughout 2020 and 2021,” he said.
“Traders will want to keep a close eye on how other central banks respond, as any discussion about resuming [quantitative easing] could have a sudden effect on [the bitcoin] price.”
While bitcoin's narrative as a safe-haven asset or inflation hedge has failed to materialize, Edward said, “it appears to have found clear support just below the $20,000 mark for several months now, despite major fiat currencies continuing to slide against the dollar.”
“This provides a new opportunity for bitcoin, which may find a new audience among the millions of affected citizens who are witnessing the rapid failure of their central banks to cap inflation and combat the rising cost of living,” he said.
Edwards said that “if central bank currencies continue to slide severely, and quantitative easing resumes on a wider scale, both bitcoin and cryptocurrency markets could see a renaissance as traditional finance continues to struggle against macroeconomic headwinds.”
Bitcoin was down about 1% to $19,090 at last check on Sept. 29, according to data firm CoinGecko. Ether, the native currency of the ethereum blockchain, slipped 1.1% to $1,303.33, while dogecoin was off slightly to $0.059953.
The White House recently published its first-ever comprehensive framework to regulate the young financial services industry, the hallmark of which is eliminating both middlemen and control of centralized entities.
“This framework demonstrates that long gone are the days when government agencies feel they can afford to ignore digital assets and the ecosystem they support,” said Winston Ma, managing partner of CloudTree Ventures.
“Among them, the Department of Treasury is emerging as a leading agency for the upcoming cryptocurrency regulations.”
He said Treasury officials outlined seven priority actions they will take, including ongoing monitoring, improving regulation and enforcement, and updating Bank Secrecy Act regulations, among others.
“The understanding of the market is that the Treasury will now undertake risk assessments on decentralized finance, followed by [nonfungible tokens],” said Ma, author of “Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse.”
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“In fact, Treasury recently released a request for comment in the Federal Register seeking feedback on the illicit finance and national security risks posed by digital assets.”
South Korean prosecutors recently announced that Terraform Labs Co-Founder Do Kwon, who is currently under investigation in South Korea for the $40 billion collapse of the algorithmic stablecoin Terra, is facing a Red Notice from Interpol.
'Losing It All'
David Lesperance, managing partner of immigration and tax adviser Lesperance & Associates, said the South Korean government has also seized $183 million of crypto from tax evaders since the beginning of 2021.
The seizure covered 17 cities, including the capital, Seoul, and targeted people and enterprises who ignored or contravened tax rules, he added.
“Across the Pacific, the IRS is also dramatically ratcheting up its efforts to catch crypto tax evaders,” Lesperance said.
“The agency has issued a so-called 'John Doe summons' requiring M.Y. Safra Bank to turn over crypto transaction data for SFOX, a digital currency prime broker that used the bank.
He added that “here is a lot of opportunity for the IRS to get crypto taxes rolling as the trading volumes reach new highs in the U.S.”
“After years of deluding themselves that crypto transactions were 'untraceable,' crypto enthusiasts are scrambling to catch up,” Lesperance said.
“For those who stick their heads in the sand and hope they are overlooked, they run a real risk of losing all their crypto holdings to tax, interest and penalties.”
Provided by: The Street Retirement
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