IMF Admits Banning Crypto Won't Work, Suggests Addressing Demand Drivers
The International Monetary Fund (IMF) has acknowledged that banning cryptocurrencies may not be an effective solution and suggests addressing the underlying drivers of crypto demand instead. This admission comes as Bitcoin remains resilient, holding above $30,000 despite negative market sentiments in the United States.
Bitcoin's dominance in the crypto market has increased, outperforming other cryptocurrencies, thanks to recent news about the potential launch of Bitcoin exchange-traded funds (ETFs). Bitcoin's dominance, which was below 50% during the winter, has skyrocketed, with the cryptocurrency recording an 18% increase over the week compared to a 12% increase for other cryptos. BlackRock's proposal for a Bitcoin ETF played a significant role in stimulating this surge.
The IMF recommends focusing on addressing the factors driving crypto demand rather than implementing outright bans. While a few countries have completely prohibited crypto assets, the IMF suggests that meeting citizens' unmet digital payment needs and improving transparency could be more effective in the long run.
In other news, JP Morgan, despite its CEO Jamie Dimon's historically critical stance on Bitcoin, has launched Euro payments on the blockchain. The financial institution has been leveraging blockchain technology for transactions between entities and partners for some time now, showcasing its commitment to utilizing the potential of blockchain technology.
Bitcoin's resilience is further demonstrated by its ability to maintain its value above $30,000, partially due to significant expirations in the market. Kraken, a prominent cryptocurrency exchange, has witnessed the second-largest outflow ever, with a value of $225 million. This suggests that investors continue to view Bitcoin as a viable long-term investment option.
Bitcoin's fundamentals remain robust and are improving over time. Technical analysis indicates similarities in bottom points, indicating that the current period may present a favorable buying opportunity. Historical patterns, such as the halving events in 2012, 2016, 2020, and the upcoming event in 2023, highlight a drawdown pattern that has historically preceded positive price movements.
Institutional interest in cryptocurrencies extends beyond Bitcoin, with Ethereum staking becoming more accessible to institutions. Ethereum staking allows these entities to become validators by locking up a minimum of 32 ETH. The Winklevoss twins are launching Ethereum staking services in the UK, further expanding the options available to institutional investors.
The popularity of staking is not limited to Ethereum, as interest in staking BTC also grows. Notable mentions include ETH staking valued at $60,000 and discussions around potential price targets for BTC, with one target reaching 31.6.
As the IMF recognizes the limitations of banning cryptocurrencies, the focus shifts towards addressing the driving forces behind crypto demand. This shift, coupled with ongoing developments and institutional interest in the crypto space, continues to shape the future of digital assets.