Joe Biden has quickly begun making changes in his first weeks in office. One of these is his $1.9 trillion dollar stimulus bill entitled the “American Rescue Plan.” This bill is intended to help Americans who are struggling due to the sluggish Covid-economy, including those facing foreclosure. Additionally, Biden has announced some key appointees that have shown significant interest in cryptocurrency regulation. This may mean that 2021 will be a pivotal year for crypto markets, potentially leading to new crypto laws.
Biden Plans a Large Stimulus
Joe Biden’s “American Rescue Plan” hopes to have a large impact on the US economy. The two step plan is far reaching and has some lofty goals, including:
- Stimulating the economy,
- Promoting racial justice,
- Helping to administer Covid-19 vaccinations,
- Protecting the environment, and
- Extending the foreclosure moratorium.
These protections are welcome for many Americans. While Biden previously extended the foreclosure moratorium, the current deadline for the moratorium is March 31, 2021. The Covid shutdown has been hard on many families, and some estimates believe that over 3.3 million homeowners are behind on their payments. This means that absent some action, a large influx of foreclosures is expected in 2021. We recommend that those who are behind on their payments act now and get foreclosure help prior to the moratorium lapsing. Once the eventual wave of foreclosures comes, unprepared homeowners may be forced to sell their homes in a saturated market.
Biden’s Cryptocurrency Appointees
Biden has also announced a slew of appointments in his first weeks in office. Two of which are particularly important for cryptocurrency investors:
- Gary Gensler was appointed as head of the U.S. Securities and Exchange Commission (“SEC”). Mr. Gensler is a former professor at the MIT Sloan School of Management. He focused his studies on blockchain, fintech, and cryptocurrencies, and lectured on these subjects as well. Those who know him well say that he is friendly to the crypto currency trend.
- Janet Yellen was appointed as head of the U.S. Treasury. Ms. Yellen is the former chair of the Federal Reserve and is well known for expressing her concerns with cryptocurrency and its potential illicit uses.
The Impact of Biden’s Appointees
The US Economy is best characterized as a free market with moderate oversight to protect those who are vulnerable to manipulation. Currently, however, there are few, if any, US crypto regulations in place. The recurring struggle with Bitcoin and other cryptocurrencies is the tension between their uses as highly-speculative investment vehicles and tender for everyday purchases.
With Janet Yellen’s well-known criticisms of crypto and Mr. Genslers’s knowledge of crypto usage in the business space, new regulations to protect the retail investor seem likely. One possible outcome that would make both happy is the regulation of Bitcoin and other cryptos like securities, with oversight provided by the SEC. Regulators may also look into regulating other aspects of crypto, such as how blockchain transactions are verified. This would allow protection for retail investors, but may ultimately curtail its effectiveness as an everyday payment method.
Is Now the Time to Invest in Bitcoin?
There is no simple answer to whether now is the right time to invest in Bitcoin. Bitcoin is highly speculative. That being said, it continues to soar in price and popularity. As we have consistently reported, Bitcoin transactions are quickly becoming a part of everyday life. The more widely used bitcoin becomes, the more it looks like a good investment strategy. Any investor in Bitcoin, however, needs to understand that eventual regulations may affect the price of Bitcoin, both positively and negatively. If a Bitcoin investment fits your investment needs, we recommend that you monitor crypto news sites and stay up to date on the latest crypto news.
How 2020 Changed the Crypto Landscape
2020 was an impactful year for everyone and everything, including crypto. The most recent technological change to the US economy was the impact of retail investors. With retail investors stuck at home with easy access to crypto exchanges on their phones, interest for crypto has skyrocketed. At the same time, 2020 and 2021 saw major “pump and dumps” in the crypto markets, with individuals losing and gaining thousands in highly speculative cryptocurrencies, such as Dogecoin. Needless to say, the US regulators have taken notice. With thousands of regulations covering the sale and exchange of securities in the United States, it seems that the SEC and Biden Administration may not tolerate a world without new crypto laws for much longer.
The Future for Crypto Investors
Crypto investors are on the forefront of an emerging and world-changing technology. Bitcoin is being accepted everywhere, from your local grocery store to Irish online casinos. The future is still uncertain, however, on whether cryptocurrencies will remain as speculative investments or mature into highly stable legal tenders. Either way, we recommend that investors and users of Bitcoin and other cryptocurrencies stay attentive over the next few years, as the changing regulatory environment may result in some exciting news for the crypto markets.
This article is for information and educational purposes only and does not form a recommendation to invest or otherwise. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.