Bitcoin bounces back as Brazil embraces crypto

GB Market Update 05/12/2022

by Marcus Sotiriou

Bitcoin has managed to reclaim $16,800 and climbed over the weekend to $17,300 at time of writing, as it follows U.S. stock market’s recovery. However, the S&P 500 faces strong resistance at around 4,100-4,200, which is not far from its current price of 4060, and Bitcoin is approaching a key resistance level at $17,600, so we could see sell pressure come in soon.

Regulation is the key topic of conversation in the crypto space after the FTX collapse, with the majority of investors hoping that regulators act fast to provide clarity. Brazil took a significant step forward last week, as they approved crypto as a legitimate payment method – it was recognised as payment last Tuesday in the Chamber of Deputies after 7 years of debate.

Digital assets are defined as digital representations of value that, can be negotiated or transferred electronically, and used for payments or investments. It is important to note that this does not make Bitcoin or any cryptocurrency in Brazil legal tender, but it does legitimise crypto as a legal payment method for Brazil’s 214 million citizens. It also provides greater regulatory clarity for businesses who wish to use crypto as a payment method.

Whether or not this will result in mass adoption of crypto in Brazil remains to be seen, based on the Brazilian regulator’s actions, but it is nonetheless a sign of a willingness to embrace the technology, and hence a huge step forward.