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The U.S. government shutdown has entered its 35th day. Of course, the crypto market isn’t the only market that has been impacted by the government shut down, but the market correlates directly with most economic issues.
Federal agencies that are in charge of crypto regulation, including the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), have placed major developments on hold due to the government shut down.
Because of this, we’ve been seeing delays in certain regulatory approvals as well as ETF approvals.
Delays in ETF approval
As we mentioned above, the government shutdown has led to a delay in ETF approvals for the crypto market. The SEC is directly impacted by the shutdown and as their website states, they have very limited staff available to respond primarily to emergency situations. Although ETFs isn’t considered to be “an emergency” situation, the number of limited staffs working will result in a delay for ETF approvals.
The Bitcoin ETF filing has been temporarily withdrawn. The SEC is actively working with regulators and major market participants to build appropriate market structure frameworks for a Bitcoin ETF and digital assets in general. It seems like everyone is still waiting for an update on this.
According to the SEC, “We expect this to impact timelines around their processing of things like a Bitcoin ETF as the backlog continues to grow.”
In terms of its impact on crypto as a whole, crypto has faced many challenges over the course of its development so while this may slow things down it’s unlikely to derail them completely.
Delays in growing talents within the blockchain and crypto industry
Nishant Jacob, Senior Product Manager at BitBounce, a Tim Draper-backed cryptocurrency company with over 1.4 million registered users recently spoke with CCN about this. “As a business, we have been impacted by being unable to access important immigration services such as e-verify, which affects our current employees and our ability to hire skilled foreign new graduates. This causes potential issues with talent acquisition and retention.”
We’ve been seeing more and more blockchain talents come from overseas into the USA. Most of these blockchain startups are more than happy to employ and offer visa sponsorship to top blockchain roles such as developers. At the end of the day, these blockchain startups still save more money in the long run than hiring someone locally. With the government shut down, everything including verification and sponsorship is delayed.
This creates a major impact to the crypto markets as whole because, without talents, blockchain companies won’t be able to grow.
Regulation runs the crypto market in USA
A lack of regulations can, unfortunately, create uncertainty which makes it hard to plan towards longer-term goals. Of course, regulation that is overly strict can crush an emerging space, so a delicate balance is required here with regulators understanding the technology they intend to regulate and providing commonsense regulations that provide certainty for organizations without stifling innovation.
The ongoing government shutdown is bad for the economy, according to JP Morgan CEO Jamie Dimon. “Someone estimated that if it goes on for the whole quarter, it can reduce growth to zero” as reported by CNBC earlier today.
As federal contractors lose millions of dollars a day and JPMorgan’s CEO predicts that an extended shutdown could slash U.S. economic growth to zero, every industry in the U.S. and further afield continues to feel its effects.