Almost every announcement that emerges from Russia tends to be treated with cynicism by the markets, with the reported development of an effective Covid-19 vaccine in the region met with incredible levels of scrutiny and disbelief.
However, the nation does appear to be changing its relationship with Bitcoin, after Russian lawmakers passed a bill affording this asset and similar cryptocurrencies legal status.
This law will come into play in January 2021, and while users still won’t be able to pay for goods and services with crypto tokens, it represents a significant step forward for Bitcoin and its shift into the mainstream.
In this post, we’ll appraise the impact of the new law, both in the cryptocurrency realm and the financial marketplace. So, let’s get started.
How has Bitcoin Responded to the New Law?
While the new law doesn’t make provision for customers to actually use Bitcoin and similar tokens to buy goods and services, it undoubtedly lays the foundation for further and similarly positive legislation in the future.
So, not only will enthusiasts be legally able to mine Bitcoins and alternative tokens from January next year, it’s likely that the laws pertaining to cryptocurrency usage and expenditure will also be relaxed over the course of the next couple of years or more.
This has definitely helped Bitcoin and its rival tokens to experience price hikes in the global market, reaching a competitive 9,080.71 GBP at the beginning of the week.
This peak followed a relatively volatile start to trading, with the announcement from Russia exacerbating initial gains made following the renewed commitment of Facebook to create a crypto-powered payments platform to underpin all of its projects.
This latest rally is indicative of improving fundamentals for the cryptocurrency space, which is set for sustained and relatively consistent growth in the long-term.
According to Edward Moya from Oanda, this should also help Bitcoin to attract further institutional investment in the near-term, as it continues to emerge as a mainstream payment platform for banks and similar institutions.
The Future for Cryptocurrencies
Bitcoin remains the poster boy for the crypto space, with this asset now boasting a total market cap of $117.81 billion.
While this is lower than during the token’s historic price run in 2017, Bitcoin now makes up less than half of the total market cap of all cryptocurrencies, highlighting the renewed depth of the marketplace and the options available to investors.
Interestingly, the ground-breaking DeFi platform has now achieved a market cap of $15 billion, up from $11 billion on August 9th. A cutting-edge decentralised finance app, this blockchain-powered platform that allows for the recreation of traditional financial instruments and structures within decentralised architecture.
Make no mistake; this is seen as a major breakthrough for the cryptocurrency market and the future of this space, while it has certainly helped to add credibility to existing tokens and encouraged both governments and institutions to embrace all that it has to offer.
This, coupled with the changing legislative space and commitment of major institutions to integrate Bitcoin into their platforms, is sure to alert investors and reinforce the value of cryptocurrency in the short and medium-term.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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