agreement on the MiCA Law and bitcoin is experiencing its worst bear market

agreement on the MiCA Law and bitcoin is experiencing its worst bear market
Key facts:
  • Bitcoin will rally 50% by the end of this year, say analysts at Deutsche Bank.

  • According to the BIS, the risk of stagflation is increasing and bitcoin will not come to the rescue.

Among the most outstanding news of the week is the agreement reached by European parliamentarians regarding the Regulation on Cryptoactive Markets, better known as the MiCA Law. The regulation was agreed under a “provisional political” agreement, whose main objective is to regulate issuers and service providers with cryptocurrencies.

In this context, the price of BTC continued its downward trend. This weekend, it touched $18,000 again. At the time of this writing, bitcoin is trading at USD 19,385, as reflected in the market price of Latin America and Spain, according to the CriptoNoticias price calculator.

These are the most important news:

  • After several years of intense debates in the European Parliament, MEPs reached an agreement for the regulation of the cryptocurrency sector. The regulations approved seeks to harmonize the European Union (EU) market, establish legal certainty, improve consumer protection and prevent fraud. Additionally, the Parliament also approved a new rule on a provisional basis that will allow monitoring operations with BTC and identifying the users who carry them out, even if they are small amounts. The European community believes that MiCA has positive aspects, but they also see elements that will add obstacles for the ecosystem to flourish in the region. In this sense, they expressed their rejection by standard to track bitcoin transactions.
  • For the analysis firm Glassnode, the current correction of the bitcoin market is one of the strongest experienced by the cryptoactive. This, taking into account the fall in price, the duration of the correction, together with the liquidations that have occurred. “With the current draw reaching -73.3% below the November 2021 all-time high, and lasting between 227 days and 435 days, this bear market now presents itself firmly with historical magnitude and characteristics,” concludes Glassnode in your report. In the midst of this scenario, the cryptocurrency June ended with the hardest monthly fall so far this year, with a depreciation of 40.6%.
  • Although the statistics certify the drastic drop in the value of the pioneering cryptocurrency, the Deutsche Bank foresees a rebound of the price of BTC to USD 28,000 for December this year, which represents an increase of 47% compared to the current price. The estimate is made considering the high correlation that exists between the stock market and the cryptocurrency market. This highlights the fact that, during the first half of 2022, Wall Street stocks also have had their worst setback since 1970. For this reason, Deutsche Bank analyzes suggest that the S&P 500 index will return to the levels it had at the beginning of the year, as will bitcoin.
  • Cryptocurrency exchange Robinhood branded the recession as the word that is on everyone’s lips . “The probability of a US recession soared this quarter as the Fed raised interest rates to control inflation.” This view is shared in the “Annual Economic Report” of the Bank for International Settlements (BIS), which speaks of a high risk of stagflation (stagnation with inflation). The stock market specialists, Hugo Ferrer and Peter Schiff, also say so, for whom the recession has already begun, generating a panorama of uncertainty in the markets and driving the falls of bitcoin and the stock market. Consequently, the BIS advises banks that their Tier 1 capital exposure to bitcoin be only up to 1%.
  • According to analysts at Hashrate Index, it is possible that the oldest Bitcoin mining ASICs fall to zero values ​​before the bear market ends. According to specialists, old-fashioned miners, such as Bitmain’s Antminer S9 (13.5 TH/s), although they were affected “less severely” by the price drop, are much less solvent than their most up-to-date versions. On the other hand, in the United States, a storm shut down a mining farm of the Marathon company, made up of at least 30,000 Bitcoin miners. Most were inoperable due to lack of electricity. Meanwhile, in Ethereum, the so-called “merge” (The Merge) between the current and the new blockchain, continues to have its preliminary tests. This week it was the turn of Sepolia, the second testnet in which this process is experienced.
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If you want to know the meaning of several words of the terminology of the crypto world, you can consult them in the extensive Glossary of CriptoNoticias. Here’s a little preview with the word Goxxed.

goxxed: It comes from the infamous and now defunct Mt. Gox exchange, which, despite being the largest in the world at the time, used to suffer from various technical problems. Goxxed then refers to someone or something that is being hindered by the same problems. It can also refer to when a service offered by a third party —such as an exchange or wallet— does not allow you to withdraw your funds.