Bitcoin Price Prediction
• Bitcoin and Ethereum are ending the week on a bearish note, with both coins continuing to lose value.
• Binance is facing crypto regulations in the US and Dubai due to its ownership structure, governance and auditing procedures.
• The broad-based US dollar has been gaining traction due to previously released US job data showing the US economy is growing.
Bitcoin Price Decline
Bitcoin recently fell below $28,000, while Ethereum has fallen to $1,800. Although Bitcoin reached $28,500 earlier this week, the rally was short-lived as the price quickly fell. Similarly, Ethereum failed to reach $1,800 on Sunday morning causing investors to be concerned. This price decline can be traced back to news that Binance is facing crypto regulations in the US and Dubai from the Virtual Assets Regulatory Authority (VARA) in Dubai.
Impact of Regulations
The regulation faced by Binance could potentially have an impact on Bitcoin prices as it increases the likelihood that the Federal Reserve will have to raise interest rates next month. Market participants now believe there is a 70% chance that interest rates will rise which would likely negatively impact bitcoin prices further.
Dubai Regulations Explained
The VARA in Dubai has told Binance which got an MVP license from them in September 2022 to submit more information about its ownership structure, governance and auditing procedures. This is part of an attempt by Dubai city government to meet challenges posed by cryptocurrencies with tough laws and ensure compliance with highest regulatory requirements.
Binance management has stated they have provided all essential answers required for VARA through their regulatory and fiduciary duties so far but it remains unclear what effect these measures will have on Bitcoin prices going forward.