September has historically been a month of decline for crypto markets. In contrast, October generally treated investors well. Sure enough, markets are now on the rise as we enter the new month on positive news from the US, recovering from a difficult uncertain week from China.
Evergrande
As China doubled its stance / ban on crypto last week, markets faltered with FUD. The news of the insolvency of real estate developer Evergrande and the effects it would have on markets around the world made matters worse.
While initial fears surrounding the situation have since subsided, they have yet to be resolved, with Evergrande having already defaulted on several loan repayments. Interestingly, a growing group believes China will be able to resolve Evergrande’s potential implosion and has started buying up debt in the company.
No intention to ban
When the aforementioned events happened, there was a significant amount of new wallets that sold out in panic, clearly not yet having experienced a Chinese crypto ban – something that has happened no less than 7 times over the years. Understandably, many have come to wonder and worry if the United States will follow a similar path moving forward.
Fortunately, Federal Reserve Jerome Powell has allayed those fears, explicitly stating that the government has “no intention of banning” cryptocurrencies.
A billionaire perspective
In addition to the Federal Reserve chief’s comments on cryptocurrencies, this week several billionaires also shared their opinion. Both Elon Musk and Orlando Bravo have both independently indicated that they believe cryptocurrencies are not going anywhere and cannot be stopped.
In an interview with CNBC, Orlando Bravo said: “How could you not like crypto? Crypto is just a great system. It’s frictionless. It’s decentralized. And young people want their own financial system. So he’s here to stay.
Speaking at a coding conference, Elon Musk said: “It is not possible, I think, to destroy crypto, but it is possible for governments to slow its progress.”
Without a doubt, if they have come to these conclusions (along with millions of existing enthusiasts / market participants), then it is not surprising to see the Federal Reserve do the same. With the clarity now provided on a potential ban, we hope that in the future there can be thoughtful regulation that promotes growth and safety.
Market reaction
When looking at BTC’s performance over the past week, it is clear that the market was suffering under the weight of developments from China. If the market were to recover, significant positive news was needed – and that’s exactly what it got.
After hitting $ 40,000, BTC was able to post a dramatic recovery after news from the United States with no intention to ban cryptocurrencies began to circulate. While this is an important statement, other more modest but positive developments occurred over the past week, namely El Salvador officially launched its volcanic (geothermal) green mining initiative.
While things looked a bit precarious, this price hike at the end of the month provided another example of popular analyst ‘PlanB’ nailing another price prediction. In doing so, the stock-flow model remains intact. Going forward, PlanB notes the following floor prices for the next monthly closings.
