- The Binance settlement with the United States government is expected to provide a template of how other crypto firms will operate to coexist with the set financial laws.
- The demand for Bitcoin, Ethereum, and other digital assets has continued to grow as traditional investment instruments struggle to compete in the web3 global revolution.
The dust created by the $4.3 billion settlement between the United States government and the leading cryptocurrency exchange, Binance Holdings, is quickly waning as Bitcoin (BTC) and Ethereum (ETH) lead in the wider crypto breakout. The fast reaction by the Binance team to replace former Chief Executive Officer Changpeng Zhao alias CZ with Richard Teng significantly helped fill the void and eliminate short-term uncertainties.
However, the historical settlement with the United States Department of Treasury has sent shock waves among most web3 founders. Moreover, the United States government has stamped its authority over the international financial system, with the dollar dominating the majority of global reserves.
Nonetheless, the settlement has sent a clear message that Bitcoin and the digital industry are the future of the financial industry. Meanwhile, more cash flow from gold and traditional investment products has helped fuel the ongoing crypto bullish outlook.
Are Legacy Crypto Firms Doomed in the US
The United States financial system is globally recognized for its success over the past decades. However, the rise of Bitcoin as a global reserve currency has significantly threatened the United States financial system. Moreover, the banking crisis earlier this year that was absorbed by the Fed printing more dollars, which has resulted in a higher debt-to-tax ratio, has triggered a mass exodus of institutional funds to crypto investment products. The rate is expected to be expedited after the United States Securities and Exchange Commission (SEC) approves the dozen spot Bitcoin exchange-traded funds (ETFs).
Undeniably, other global markets have recognized the role of Bitcoin, Ethereum, and other digital assets in supporting their respective gross domestic product (GDP). However, the United States has continued to make the web3 industry less available for ordinally investors, following the Binance settlement. Moreover, several other crypto exchanges led by Kraken, and Bybit are on the radar of the US regulatory agencies. CFTC Commissioner Kristin Johnson noted;
My hope would be that we have seen a spike, and what we will see going forward is that these early cases will really be a bit of cautionary tale for those firms that really do want to successfully operate in this ecosystem. For those firms that really do want to successfully operate in this space, there is an increasingly clear template for how to operate. Take the hint,
Market Implications
The total crypto market cap has risen to a new yearly high of around $1.67 trillion despite the regulatory crackdown in the United States. While Bitcoin is gradually approaching a major psychological resistance zone of around $48k, the altcoin market led by Ethereum and the meme coin industry is revving up for a major in the coming weeks.
Furthermore, on-chain data shows some Bitcoin whale taking profits and diversifying into the altcoin market.
