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Although the market for cryptocurrencies started to rise at the beginning of 2023, the overall prognosis is still uncertain because of the ongoing economic downturn. Nevertheless, it is now safe to say that the cryptocurrency market had a declining trend in 2022.

For instance, the recent collapse of FTX, a Bahamian cryptocurrency exchange established by Sam Bankman-Fried, has created a significant deal of uncertainty in the cryptocurrency industry.

U.S. lawmakers are spinning two different stories about the aftermath of the FTX collapse. However, the Senate Banking Committee is all set to hold a hearing on February 14 to discuss safeguards for the financial system against the risks associated with digital assets. The hearing is called “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets.”

U.S. Sen. Tim Scott (R-S.C.), the chair of the Senate Banking Committee and the top Republican on the committee said in a statement on Thursday that he wanted to begin work on a bipartisan regulatory framework for cryptocurrencies on that day.

Sen. Scott said, “Recent years have seen expansive growth in the digital assets industry, including an increasing number of consumers interacting with cryptocurrencies. Several high-profile failures resulted in lost consumer assets, exposed regulatory gaps, and highlighted concerns with illicit finance.”

A Difference of Opinion

Congress had a meeting to discuss what Washington should do in the wake of the shocking collapse of the cryptocurrency exchange FTX. Senators urged for immediate legislative action to protect consumers, but there are still numerous differences of opinion over the specifics of such efforts. The debate over how precisely cryptocurrency should be regulated in the United States is expected to last for months.

The FOMC announcement on Wednesday brought bad news to the cryptocurrency industry, and the price of Bitcoin eventually fell below $24,000. However, on the flip side, the Fed’s shift to a dovish policy after remaining hawkish throughout 2022 has been a signal for the cryptocurrency market to rally, and the market has capitalized on this by increasing liquidations.