Government policy is often the trigger for the performance of any market, which might be positive or negative depending on the aim of the policy.
Following the announcement of the executive order by the president of the United States, Joe Biden, the cryptocurrency and blockchain firms have reacted positively to the news with an accompanying surge in prices.
The long-awaited executive order that mandated federal agencies in the U.S. to create a regulatory mechanism around digital assets, coupled with the idea of exploring the viability of a digital dollar, has seen the entire market welcome the move with open arms.
How The Market Performed
Available market performance following the signing of the executive order has seen Coinbase rise by 10.5% and shares in MicroStrategy (MSTR) record a gain of 6.4%, according to the data released by TradingView.
The blockchain industry’s exchange-traded funds (ETF) also enjoyed a renewed performance, with the ProShares Bitcoin Strategy ETF seeing a 10% increase and the Valkyrie Bitcoin Strategy gaining 10.3%.
The biggest gainers in this period are the crypto mining firms; Riot Blockchain Inc. had 11.2%, and Marathon Digital Holdings Inc. saw a 13.5% surge in value. Analyst Jonathan Peterson is reported to have restored his buying rating for Marathon Digital Holdings in a message to clients by stating that cryptocurrency miners are the most likely industry players to gain from the official recognition and support of the digital currency industry.
The crypto market has been used to 10% price swings for some time; beneath the surface, there is a volatile trend taking place in the traditional market despite the increase that the market has experienced for the past couple of days.
As it is, Coinbase was down by almost 48% from its previous price listing in April last year, while RIOT is adjudged to be in the worst position than it was previously in, with its price down by 76% from its high in February.
Upon receiving details of the executive order, Bitcoin’s price jumped by up to 9% the previous day before coming down to a 5% gain.
Besides the apparent positive price performance that greeted the arrival of the executive order, most investors believe that the executive order is a net positive for the whole industry, going by the initial fears that it was meant to limit the operation of cryptocurrency in the United States.
President Joe Biden sees the executive order as a chance to recover the once-dominant figure of the U.S. in the global financial ecosystem and the technology sphere.
Although the order did not explicitly outline the type of regulation that is to be expected, the sentiments of the federal government officials point to the potential for and adoption of digital currencies within the U.S. mainstream financial sector.
According to Treasury Secretary Janet Yellen, President Biden’s order calls for a concerted and coordinated effort for the digital asset industry.
This is a win for the industry, notwithstanding the calls from some quarters urging the government to ban cryptocurrency.