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How Does Strategy Impact Bitcoin Prices?
Variables of Regulatory Environment
Market Trends Still Await Observation
Yanowitz pointed out that Strategy has been aggressively buying Bitcoin for the past few months, with a cumulative investment of over $20 billion. He believes that without this support, the price of Bitcoin could plummet significantly. This may mean that Strategy’s buying behavior has made the market cycle of Bitcoin different from before, and the market may still be in the early stage of a bull market, rather than approaching its peak.
His viewpoint is also supported by Dan Matuszewski, the co-founder of CMS Holdings. Matuszewski believes that the current market’s lack of inflow of venture capital funds indicates that the overall environment is still in a “Player versus Player” game mode, which is different from previous bull market cycles. He analyzed:
“The market impact of 2021 has not completely dissipated, and liquidity is limited. Therefore, it is difficult to drive large-scale capital inflows, and venture capital remains a key indicator for evaluating the altcoin market.”
Santiago Santos, a cryptocurrency investor, also expressed a similar view, believing that the market still needs to see more capital inflows and that the current funds are primarily concentrated in a few popular assets, without forming a comprehensive bull market trend.
In addition to discussing whether the bull market has reached its peak, the regulatory environment in the United States is also an important factor affecting market development. Recently, the US Congress held a hearing on “Operation Chokepoint 2.0,” discussing whether regulatory agencies deliberately suppress cryptocurrency companies’ access to banking services.
Operation Chokepoint 2.0 refers to the Federal Deposit Insurance Corporation (FDIC) and other regulatory agencies pressuring banks to prevent them from providing financial services to cryptocurrency companies, leading to many cryptocurrency companies struggling to obtain bank accounts.
According to Paul Grewal, Coinbase’s Chief Legal Officer, in his testimony at the hearing, these actions by regulatory agencies have caused banks to hesitate in dealing with cryptocurrency companies, making it difficult for many companies to obtain basic financial services. He stated:
“When banks actively seek permission to provide these services, they are either ignored or asked to undergo burdensome reviews until they eventually give up.”
Furthermore, Austin Campbell, CEO of WSPN USA, also pointed out at the hearing that regulatory agencies choose to suppress the entire industry due to the misconduct of a few cryptocurrency companies (such as the FTX scandal), which is extremely detrimental to market development.
Although there have been some signs of improvement in the US regulatory environment recently, Yanowitz believes that simply changing the management of the FDIC is not enough to fundamentally change the status quo. The market still needs a more transparent and fair regulatory framework to ensure the continuous development of the cryptocurrency industry in a legal and compliant environment.
Currently, there is still a divergence of opinions in the market regarding whether Bitcoin has reached its peak. On the one hand, Strategy’s large-scale buying actions may support the price and prevent the market from entering the late stage of a bull market. On the other hand, the uncertainty of the regulatory environment may still affect investor confidence.
Regardless of the stage the market is in, Yanowitz emphasizes that changes in regulatory policies and the dynamics of capital inflows will still be key factors influencing the cryptocurrency market in the future. Investors should closely monitor market dynamics to respond to potential risks and opportunities.
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