Lagarde calls for Global Regulation. How Bitcoin logs the revenge recovery?
Bitcoin prices rose on Wednesday, defying gloomy predictions, as Christine Lagarde emphasized the importance of global regulation.
The European Central Bank President told Reuters that Bitcoin is a highly speculative currency that has permitted “some terrible behavior,” such as money laundering, and that “there needs to be regulation” to prevent its misuse on a global scale.
The words came after Bitcoin’s dramatic drop from its all-time high this week. Over the weekend, the flagship cryptocurrency was sold off over $42,000 due to profit-taking mood, and it dropped by about 29 percent in the following sessions. It had previously risen by over 100% in just three weeks of business.
Ms. Lagarde was shaken by Bitcoin’s tremendous volatility, and she emphasized that the cryptocurrency may never become a currency. She referred to it as a “very speculative asset” that was known for engaging in “some funny stuff” during the course of its 11-year existence.
Nonetheless, Ms. Lagarde’s scathing assessment of Bitcoin failed to sway the currency’s intraday upward trend. The cryptocurrency jumped more than 3% to $35,954 in less than an hour after the ECB chief’s remarks hit the wire, breaking free from the choppy pattern that had dominated the European and Asian sessions on Wednesday.
The BTC/USD exchange rate broke above its 20-day exponential moving average wave, indicating a desire to recover towards its 50-day simple moving average, then breakout towards its all-time high above $42,000.
Bitcoin sustaining the 20-DMA as support is a positive indicator, according to old fractals.
Tyler Winklevoss, the co-founder and CEO of Gemini, a US-based cryptocurrency exchange, suggested that investors bought Bitcoin not to speculate, but to get away from the “funny business” of centralized exchanges engaged in limitless money production.
“Bitcoin is a movement that will never die,” he continued, citing the cryptocurrency as one of the most defensive assets against inflation and fiat devaluation.
The long-term trend of Bitcoin
More investors are considering the possibility of more government expenditure in the United States, as promised by President-elect Joe Biden to help the economy. Meanwhile, the Federal Reserve’s pledge to buy government and corporate loans while maintaining interest rates around zero until 2023 is driving investors away from cash-based safe havens and toward riskier options like Bitcoin.