Bitcoin Weekly Recap: BTC drops below $84K, FDIC eases crypto rules, and South Carolina eyes Bitcoin investments

Bitcoin never fails to make headlines, and this past week has been no exception. From sharp price fluctuations to major regulatory shifts and growing institutional adoption, the world’s largest cryptocurrency continues to shape the financial landscape. In this week’s Bitcoin recap, we’ll explore:

• Bitcoin’s market performance and price movements
• Regulatory shifts, including the FDIC’s crypto-friendly move and the SEC’s decision on Crypto.com
• Institutional interest, with South Carolina’s Bitcoin investment proposal and El Salvador’s diplomatic crypto discussions

Let’s dive into the major events that defined Bitcoin’s week.

Bitcoin’s Volatile Week: Price Drop Below $84,000

Bitcoin’s price has seen intense volatility over the past few days. After hitting a high earlier in the week, Bitcoin plunged below $84,000, wiping out nearly $115 billion in market value. The downturn was driven by several factors:

1. Market Sentiment and Investor Reaction

• The sudden drop triggered a cascade of liquidations in the derivatives market, causing further declines.
• Many traders rushed to take profits, intensifying the sell-off.
• Uncertainty over macroeconomic conditions, including concerns about inflation and potential Federal Reserve rate hikes, contributed to the pullback.

2. Broader Crypto Market Trends

• Bitcoin’s decline led to losses across the crypto market, with Ethereum and other altcoins also dipping.
• Crypto-related stocks followed Bitcoin’s lead, with mining firms and blockchain-focused companies seeing stock price drops.

Despite the decline, analysts remain optimistic about Bitcoin’s long-term trajectory, with some pointing to historical pre-halving corrections as a natural part of Bitcoin’s cycle.

Regulatory Developments: The FDIC and SEC Shake Up Crypto Rules

FDIC Eases Restrictions on Crypto Activities for Banks

In a surprising move, the Federal Deposit Insurance Corporation (FDIC) rolled back a previous guideline that required banks to obtain pre-approval before engaging in crypto-related activities.

This is a major win for crypto adoption because:

• It removes a major barrier for banks looking to provide crypto services.
• Traditional financial institutions can now integrate crypto more seamlessly.
• It signals a shift in the U.S. regulatory approach towards embracing digital assets.

Many in the crypto industry see this as an important step toward normalizing crypto in mainstream banking. This could lead to a surge in Bitcoin-related banking services, including custody, payments, and lending.

SEC Drops Case Against Crypto.com

In another positive regulatory move, the U.S. Securities and Exchange Commission (SEC) announced that it was dropping its case against Crypto.com.

• The SEC has been aggressively targeting crypto firms, arguing that many crypto assets should be classified as securities.
• Dropping this case may indicate a more flexible stance or a lack of clear legal ground for regulating exchanges like Crypto.com under securities laws.
• This decision could set a precedent for future crypto-related cases.

Together, these two regulatory shifts provide a much-needed boost for crypto adoption in the U.S.

Institutional Adoption: U.S. and Global Governments Eye Bitcoin Investments

South Carolina Proposes Bitcoin Investment for State Funds

One of the most intriguing developments of the week came from South Carolina, where lawmakers have introduced a bill allowing the state treasurer to invest up to 10% of state funds in Bitcoin.

• If passed, this would be one of the most significant government-backed Bitcoin investments in the U.S.
• It reflects growing acceptance of Bitcoin as a legitimate store of value and inflation hedge.
• Other states and municipalities could follow suit, leading to increased institutional demand for Bitcoin.

El Salvador Strengthens Its Bitcoin Revolution with U.S. Diplomacy

Meanwhile, in global Bitcoin news, El Salvador’s President Nayib Bukele met with U.S. President Donald Trump to discuss a potential Bitcoin alliance.

• El Salvador has been a pioneer in Bitcoin adoption, making BTC legal tender in 2021.
• The meeting signals a strategic move to strengthen El Salvador’s Bitcoin-driven economic model.
• This discussion could encourage more nations to explore Bitcoin adoption at a governmental level.