Among the most notable news of the week is the sharp drop in the price of bitcoin (BTC) after the announcement on May 4 of applying an increase in interest rates of 0.5% by the United States Federal Reserve. The news also heavily influenced stock markets causing losses.
In this context, the price of BTC fell drastically on May 5, date from which it remains at figures close to USD 34,000. The fact occurs after an advance that brought the price closer to USD 40,000 during the previous days of the week.
The fall of the cryptocurrency in the last seven days is estimated at 9.2%. At the time of this writing, BTC is trading at USD 34,563, as reflected in the market price of Latin America and Spain, according to the CriptoNoticias price calculator.
These are the most important news:
- After posting a nearly 6% rally by May 4, the bitcoin and stock markets fell back the next day. after the announcement of the FED of an increase in interest rates of 0.5%. Investor fears over the medium- and long-term economic outlook drove cryptocurrencies and the stock market as a whole lower, in one of the worst fall since 2020. In particular, BTC is repeating a negative behavior that has not been seen since 2014, since it has been falling for five consecutive weeks, this being the third time in the history of the pioneering cryptocurrency that it maintains a constant fall in that period of time.
- Dipping levels in the value of bitcoin are a sign that investors are selling their assets. They also indicate that the market is sensitive to the economic measures of the United States, which is currently registering historical inflation records, among other negative indicators. Regarding the question of whether now is a good time to buy bitcoin, analyst Eduardo Gavotti comments that “it all depends on the reason for the purchase.” Meanwhile, Bitcoin mining revenue fell 4.5% in April from March, in a trend that has been going on for months. Despite this, there was an increase in the network hashrate, remaining above 205 EH/s.
- According to a survey by the firm Alianz Life, 6 in 10 Americans feel a recession is right around the corner. Among the reasons for this fear is the fact that the United States economy contracted in the first three months of 2022, registering one of the highest inflations in the last 40 years, a situation that can affect the price of cryptocurrencies. Even so, the governor of the state of California, Gavin Newsom, signed an executive order to create a comprehensive framework for bitcoin regulation in that region of the USA, with a view to promoting the development of the ecosystem.
- After adopting bitcoin as legal currency, the Central African Republic is now in the crosshairs of the International Monetary Fund. For the agency, the matter “poses important legal, transparency and economic policy challenges,” as in El Salvador. Meanwhile, the Council of Europe proposes more rigorous regulations towards bitcoin for the alleged ease it provides to money laundering. For its part, the Bitcoin Mining Council refutes the arguments that US politicians have been making against the activity. As explained by the consortium of companies that support the industry, there is a need for education among congressmen who criticize mining so that they understand that it is not so polluting the environment.
- In Russia, a group of deputies submitted to the State Duma a bill that seeks to regulate Bitcoin mining. The law opens the possibility for Russian citizens to mine at home, as long as they register as an “individual entrepreneur or self-employed worker” and that their electricity consumption does not exceed the imposed limits. In this regard, the Federal Antimonopoly Service, an entity that supervises electricity prices, established that Bitcoin miners will have to pay a higher rate for the electricity they consume. Meanwhile, miners in neighboring Kazakhstan will have to comply with stricter procedures. This, while the government of Uzbekistan signed a decree that includes bitcoin in the country’s economic development agenda.
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 OCO.
OCO (One Cancels the Other Order): translates as “One cancels the other order.” It refers to a situation where two buy or sell orders for a certain cryptocurrency are placed at the same time. If one of those orders is accepted by the platform, the other one is automatically cancelled.