When Bitcoin (BTC-USD) gained 60.90% in 2023, crypto investors would consider that recovery. This is still well off Bitcoin’s November 2021 peak. It is also down year-on-year.
Increased regulatory scrutiny is a headwind for Bitcoin prices. This year, the sector is still recovering from major fraudulent scandals. In 2022, bankruptcies from Voyager Digital, Luna, and FTX cost $2 trillion.
The market is clawing back. Ethereum (ETH-USD) is also hired in 2023. To achieve a crypto recovery, stablecoins, tied to a reserve asset, need to handle large transactions. As volumes surge on withdrawals, stablecoins need to meet redemptions.
Regulators need to introduce rules that strengthen the crypto market. Still, banking regulators are busy stabilizing the banking network. After SIVB, Signature Bank, and Silvergate shut down, U.S. regulators may not crack down on stablecoins yet.
Hold Bitcoin
Investors who hold Bitcoin have several reasons to do so. They appreciate its future function in facilitating global transactions. Second, Bitcoin is in limited supply. This gives the holding the potential to increase in value.
Platforms that offer Stablecoin will need checks and balances that prevent fraud. More importantly, Tether, an asset-backed cryptocurrency, needs to submit to an audit. It has been given over seven years to get an audit. However, it chose not to.
