Bitcoin experienced a slight increase on Monday, rising 0.9% to $67,719.5 by 01:06 ET (05:06 GMT), following a subdued weekend performance. This upward movement comes amid ongoing uncertainty in the crypto markets, particularly due to reports that the U.S. government is investigating stablecoin giant Tether.
The cryptocurrency market found some support from a renewed risk appetite after Israel’s attack on Iran turned out to be less severe than initially feared. Additionally, positive sentiment was bolstered by Hong Kong’s proposal for tax breaks on crypto and digital assets.
However, concerns over the upcoming U.S. election and fluctuating interest rates continue to weigh on market sentiment, keeping most major cryptocurrencies within a narrow trading range.
Regulatory Scrutiny on Tether
Bitcoin’s momentum towards the $70,000 mark was hindered over the weekend by a Wall Street Journal report indicating that the U.S. Department of Justice is probing Tether for potential money laundering and sanctions violations. As the largest stablecoin issuer, Tether’s USDT token plays a crucial role in global cryptocurrency transactions. Any regulatory actions against the company could pose significant challenges for the crypto market.
While Tether has denied any knowledge of the investigation, the fears surrounding potential regulatory repercussions contributed to Bitcoin’s struggle to maintain its price near the $70,000 threshold.
Hong Kong’s Crypto Initiatives
In a positive development, Hong Kong officials announced on Monday their plans to introduce regulatory guidelines for artificial intelligence, which include potential tax breaks for digital assets. Specific details of these policies are yet to be revealed, but officials indicated they would be implemented by the end of the year.
Despite China’s ban on cryptocurrency trading in 2021, Hong Kong has maintained an open stance towards crypto. Earlier this year, the city approved the launch of spot crypto exchange-traded funds, though their impact on the broader market has been limited.
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