Bitcoin falls below 26 USD. Is there hope for a rebound?

Many cryptocurrencies have seen a significant fall in price over the past week as investor confidence has plummeted. Thanks to Moody's downgrade and ongoing action by US regulators, the price Bitcoin fell on Saturday from almost 27. dollars to 25,5 thousand. dollars, and is currently listed at 25,8 thousand. dollars. A similar fate befell Ethereum, which is currently trading at around $1, down from close to $700 last week.

Bitcoin stock correlation is weakening

In recent times, bitcoin has developed a knack of closely correlating with the stock market and technology-heavy indices such as the Nasdaq. However, this correlation seems to be weakening, as economist David Lin points out.

This correlation was based on a greater involvement of institutional funds in the market. While there is nothing overtly suggesting that institutional money is on the decline, there is certainly concern about cryptocurrencies, while the excitement about AI is elevating the tech. However, these trends tend to correct themselves in due course.

MiCa already has a start date

The EU's flagship MiCa legislation is due to enter into force on December 30, 2024 and could provide valuable regulatory certainty for the crypto sector in Europe.

Strong and fair regulation is likely to bring many benefits to a healthy crypto industry in times of volatility that keeps companies treading the ground so carefully. Where the EU leads, other countries are likely to follow suit. The UK is working on its own set of rules under the Financial Services and Markets Act.

Regulatory certainty will give investors and innovators a new boost of optimism in the sector. While any short-term price action is unlikely, it could have a profound, positive impact on the market in the long term.

Abrdn fund tokenized by Archax

Tokenization is a growing area of ​​the cryptocurrency market and has the potential to bring key traditional financial companies and products into the crypto-assets ecosystem.

Stablecoins are the best-established version of real assets represented digitally as fiat currency stored and recorded via the blockchain. The growing tokenization of TradFi assets is worth watching as it begins to blur the lines between the old world of finance and the new.

Institutional exposure to cryptocurrencies is a growing trend, even despite last year's volatility. It is clear that this element will not change and will have a huge impact on the direction of the market in the next few years.