Bitcoin is facing a fresh wave of positive sentiment, as US Secretary of Treasury, Janet Yellen made positive comments about the upcoming executive order bill on cryptocurrencies, which could be the first major regulatory breach in the United States.
The executive order bill on cryptos and its anticipation managed to lift Bitcoin from its weekly low of $37,260.20 all the way up to over $42,000 before taking a current price point of $42,178.28 per BTC.
Bitcoin’s momentum pushed the entire sector up, as according to data from CryptoBrowser, Ethereum is up six percent to a price point of $2,741.60 per ETH, while Binance Coin (BNB), Ripple (XRP), Terra (LUNA), Solana (SOL), Cardano (ADA), and Avalanche (AVAX) have surged anywhere from three all the way up to LUNA’s 18% price jump.
The much-anticipated executive order bill soon to be a reality
The United States Treasury Secretary gave the first official piece of insight about the inner workings of the executive order Biden’s administration is working on – possibly imposing stricter regulations on cryptocurrencies as part of efforts to stop Russia from dodging the imposed sanctions against the country.
Yellen, however, did not provide enough information about the regulatory mechanisms in the order but indicated that the framework would be in favor of the crypto community and the new financial sector. Yellen also elaborated that the Treasury Department would collaborate with interagency colleagues to produce a report on the development of existing payment systems, as well as the future of money as we know it.
“President Biden’s historic executive order calls for a coordinated and comprehensive approach to digital asset policy. This approach will support responsible innovation that could result in substantial benefits for the nation, consumers, and businesses,” Yellen noted, adding that the U.S. Treasury made the order with the help of the Financial Stability Oversight Council, in order to minimize the risk of cryptocurrencies to U.S. financial stability.
Not all good for Bitcoin
However, despite the roaming bullish sentiment, Bitcoin and its price may be heading for disaster, as rising electricity costs may significantly impact the performance of the entire crypto ecosystem. Indeed, according to Josh Olszewicz, head of research at Valkyrie Funds, the surge in electricity costs “will probably lead to a consolidation within the bitcoin mining community.”
Olszewicz stressed that the least effective miners would feel the rise in energy costs the hardest, preventing them from mining with as much profitability as efficient ones. The head of research of Valkyre Funds, which owns the largest ETF operator focusing directly on the sector, added that energy price hikes may have a bigger impact on the miners in Europe. The reason is the ongoing war conflict between Russia and Ukraine and the imposed financial sanctions, including banning oil imports from Russia.
Meanwhile, Bitcoin’s mining difficulty also increased substantially since December. It turns out Bitcoin’s mining difficulty jumped 9.3 percent days before the war conflict began. However, since Beijing banned crypto mining in China last May, mining difficulty is on a constant rise. After the Chinese exodus, the U.S, Russia, and Kazakhstan began the top countries in terms of mining, with Texas slowly becoming the world capital for Bitcoin mining. Texas is also on the road to becoming the world’s largest miner, putting a shadow on any foreign nation and the combined output for the rest of the U.S.