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Bitcoin has struggled to rise as U.S. Treasury Secretary Janet Yellen blocked the market from pushing El Salvador’s plans to adopt the major cryptocurrency as legal tender.
In an announcement recorded on Saturday, Salvadoran President Nayib Bukele said he plans to submit legislation that will make bitcoin legal tender. The announcement boosted investor morale, with some calling potential adoption at the government level a major bullish development.
However, the cryptocurrency remains locked in well within the Saturday trading range of $ 34,900 to $ 37,900. At the time of publication, bitcoin is changing hands at nearly $ 36,200, according to the Bitcoin CoinDesk price index, up 1% on the day.
China’s regulatory crackdown and US Treasury Secretary Janet Yellen’s latest comments on interest rates could cap the gain.
Yellen told Bloomberg on Sunday that President Joe Biden’s $ 4 trillion spending proposal would be positive for the country, even if it resulted in higher interest rates. “If we ended up with a slightly higher interest rate environment, it would actually be a plus for the company’s perspective and the Federal Reserve’s perspective,” Yellen said.
A rate hike dilutes the appeal of perceived inflation hedges such as bitcoin and gold.
China stepped up its crackdown on bitcoin trading and mining over the weekend, blocking many key cryptocurrency thought leaders on Weibo. The move comes weeks after China reiterated its long-standing ban on cryptocurrency trading and mining, driving down the price of bitcoin.
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