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Crypto in Canada Soars According to New Bank Report

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Crypto in Canada Soars According to New Bank Report

The bank of Canada released a report revealing the increase in the number of holders of bitcoin. According to the report, the number increased to 13% in 2021 from 5% in 2020. 

Although the present dip in the crypto market is one of the worst so far, it has its advantages, especially for residents of Canada. The Bank of Canada, five days back, released a report stating how the number of bitcoin holders in the country almost tripled. Averagely, most bitcoin holders held bitcoin worth $500 while using the cryptocurrency for speculation. The reason is due to Bitcoin’s extreme level of volatility. 

The report states, “The prices of crypto assets such as Bitcoin and Ether were generally four to five times more volatile throughout 2021 than the S&P 500 stock market index was.”

Meanwhile, the Bank of Canada noted that stable coins that have their value supported by liquid reserves and hinged to fiat currencies relieve other cryptocurrencies’ volatility. However, stable coins can only alleviate crypto volatility if issuers honor redemption requests.

Read more about the crypto crash here.

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The Ties Crypto has with Traditional Markets are Thriving

Via derivative tools, cryptos now have a tighter bond with the traditional finance market. Therefore, the ties have increased the potential of the shockwaves of the crypto market influencing the economic environment at large. Owing to this, the Bank of Canada report implores governments to enforce regulatory practices to prevent the exploitation of loopholes by criminals. 

Furthermore, it was only at the provincial level that digital regulation existed in Canada. Thankfully, the country’s federal government informed the general public of a financial sector legislative review in the 2022 budget. In the study, the financial sector will prioritize digital currencies.

Read more about bull and bearish markets here.

In March, the president of the United States, Joe Biden, signed an executive order. In this order, he tasked many government agencies with investigating crypto coins and regulating them. He asked these government agencies to prepare specific regulations to prevent cryptocurrencies from being used illegally, like terrorism financing and money laundering. Also, the regulations will ensure that investors’ assets are protected. 

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