The US President John Biden signed an executive order last week on cryptocurrencies. The steering committee will study the volume of crypto investments along with their effectiveness, bitcoin-profitapp.com.
The committee will also prepare and submit a report on how these investments possess the likelihood of impacting the overall financial stability of the country.
Many crypto enthusiasts and investment experts have taken this decision with open hands. This order holds the potential to understand how cryptocurrencies need to behave and how this investment may likely cause an impact on the global economy and national security.
Cryptocurrency and its price volatility
The fundamental feature of a cryptocurrency is its price volatility and market fluctuation. Every cryptocurrency is built on blockchain technology and possesses a decentralized finance option.
Blockchain allows every transaction undertaken using cryptocurrency to be broken down into single chains of the ledger. This single chain is then used to store individual transaction details. The transaction details are then stored in a public domain and allow for easy tracking of every transaction.
Despite the price volatility and market fluctuation, there has been an increasing adoption of cryptocurrency. Many online platforms including shopping sites, gaming, automobile, and merchandise today accept Bitcoin and other cryptocurrency payments.
Additionally, celebrities are endorsing this investment model and also receiving their remuneration through crypto investments.
Why are prices increasing?
The prices of cryptocurrencies have been increasing every day. Not only Bitcoin but other cryptos including Ethereum, Shiba Inu, and Polka dot have been garnering better returns on their investment. There have been global investments in all these crypto tokens and despite economic conditions, the prices continue to remain unaffected.
Despite the huge risks involved in cryptocurrency investments more than 35 million users in the USA have invested their funds with cryptocurrencies. The new order signed by Biden is another step in getting closer to this digital currency market.
The President had also agreed that he understands the potential of these investment models. The steering committee set up under him will directly oversee and develop regulations to protect investors’ interests.
Also, the initiative is not just directed toward the rich class in society. Instead, the vision is to ensure that digital currency becomes affordable and provides financial freedom to even the middle and employment class in society.
Why this action by the US government?
This sudden action on setting up the steering committee comes as an aftermath of the ongoing economic crisis. Many investment experts have been time and again voicing their opinion about the crisis. These investors also point out how the current situation could impact the overall cryptocurrency market.
Both Russia and Ukraine are trying to fund the current situation using cryptocurrencies. Ukraine’s government has received more than 40 million in terms of donations using cryptocurrency.
Many online exchanges and trading platforms are also considering a complete ban of Russian users on their platforms. This would cause a huge impact on the overall global market of cryptocurrency. With investments withdrawn or banned the volume and demand of cryptos may face a backlash.
Coinbase, the largest crypto exchange in the market has agreed that its platform saw a sudden surge in crypto investment since the order was signed. The currency may not best serve the interest of central banks, and regulatory authorities, and continue to be used for money laundering activities.
However, the craze and increase in investment opportunities cannot be ignored. Another reason for the growing interest in this investment is the ability to innovate.
Cryptocurrencies are built on blockchain technology and can perform various activities. Many cryptocurrencies currently available in the market can execute a transaction without third-party involvement. Contracts are signed and executed when certain conditions are met.
Additionally, these cryptos also work on a proof of stake model allowing the investor to stake their currencies to validate a particular transaction.
Many crypto enthusiasts, investment experts, and crypto exchanges have welcomed the idea of government involving themselves in this investment model.
This involvement shall also provide an opportunity to increase the investment model and also provide legal status to these investments. Also, there is innovation in this sector which will also allow room for better use of cryptocurrencies.