- Mexican Senator Indira Kempis shows an inclination towards making Bitcoin a legal tender.
- Bitcoin is showing signs of bottoming when compared to previous bear market bottoms of 2015 and 2019.
The global macroeconomic situation seems to be in complete disarray and Bitcoin (BTC) is once again gaining the limelight. Bitcoin was born out of the premise that when trusted financial institutions like banks fail to deliver, it could serve as a potential hedge to protect investors’ wealth.
As of now, central banks worldwide have been facing huge challenges in dealing with inflationary problems. On the other hand, top fiat currencies like the EUR, Sterling Pound (GBP), and Japanese Yen have faced a major fall this year. Also, as the Fed has flushed massive money into the economy during the pandemic, the purchasing power of the USD continues to decline.
As a result, global economies are increasingly paying attention to Bitcoin. Bitcoin’s limited supply of 21 million BTC and its decentralized nature makes it free from the clutches of central banks and gives absolute powers into the hand of the holders. Governments across the globe have started to show their interest in Bitcoin.
As per the latest development, Mexico is now considering the option to make Bitcoin a legal tender.
JUST IN – 🇲🇽 Mexican Senator: “#Bitcoin will be legal tender.” pic.twitter.com/k3pJtZ9ZNv
— Bitcoin Magazine (@BitcoinMagazine) October 3, 2022
The development comes just a year after Latin American country El Salvador made BTC a legal tender. Tier-III economies have been showing a greater affinity for Bitcoin as inflation goes out of control crushing their economic growth.
It is just a matter of time before Bitcoin can become legal tender worldwide. As regulatory agencies worldwide have been working on crypto frameworks, there will be more clarity with time.
Bitcoin shows signs of bottoming out
The world’s largest cryptocurrency Bitcoin has shown greater resilience over the last few weeks despite the strong volatility on Wall Street. As per on-chain data, Bitcoin is showing similar to previous bear-market bottoms. As per Ki Young Ju, CEO of on-chain data provider CryptoQuant, the Bitcoin accumulation levels have touched a 7-year high. In his latest tweet Ju noted:
BTC accumulation level reached a 7-year high. Over 6-month-old Bitcoins now take 74% of the realized cap. It was 70%, and 77% at the last bottoms in 2019, and 2015 respectively. Imagine you buy Bitcoins and do nothing over six months. You know how hard it is.
The CryptoQuant CEO clarifies that he doesn’t mean that over 74 percent of BTC haven’t moved in the last six months. “It’s not just about Bitcoin supply but realized capitalization. I meant ‘over six-month-old Bitcoins take 74% of the realized cap, which means over six-month-old unmoved Bitcoins take 74% of market cap in terms of PnL realization,” he added.
Although BTC has been showing greater resilience, it is difficult to say whether it has completely decoupled from the equity market.