• US regulators issued a joint statement warning banks about the risks of cryptocurrencies, such as fraud, volatility, contagion, and consumer protection.
• Despite this news, Bitcoin is off to a steady start in the new year, trading at $16,844 and retesting its range high of $16,900.
• Leading indicators MACD and RSI suggest that there may be potential for Bitcoin to recover in 2023.
Cryptocurrencies have long been a topic of discussion among financial regulators around the world, and the US is no exception. On January 4, 2023, US regulatory agencies issued their first ever warning to banks about cryptocurrency-related risks. The joint statement, released by the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), highlighted the potential risks posed by cryptocurrencies, such as fraud, volatility, contagion, and problems related to consumer protection.
The statement went on to caution banks that offering services to any particular group of customers is not forbidden, but that issuing or holding crypto assets is probably not in line with safe banking practices. This news comes shortly after Bitcoin, the world’s leading cryptocurrency, has been seeing signs of a potential recovery in the new year.
As of writing, Bitcoin is up 1.13% for the day and 1.42% for the week, trading at $16,844. This price is once again retesting the range high of $16,900, as well as its FIB 0.5 level resistance. The leading indicators RSI and MACD are also suggesting that there may be potential for Bitcoin to recover in 2023. MACD has recently formed a bullish crossover caused by four consecutive days of green candle closes, while RSI is looking to break the 70 level resistance.
While it is uncertain what the future holds for cryptocurrencies, it is clear that US regulatory agencies are taking a proactive stance in order to protect the financial system from potential risks. It is important to note that while cryptocurrencies can be risky investments, they offer many potential benefits as well. As such, it is up to each individual to determine whether or not they are willing to take the risk.