Did a New Ban on Weed Cause Bitcoin to Fall Below $100K?

The cryptocurrency experienced a sharp decline in its price on Thursday afternoon, falling below the $100K threshold and landing in the $98K range. Some analysts have connected this unexpected fall to a new hemp industry ban introduced in the latest U.S. government funding bill. This bill, celebrated for ending the longest U.S. government shutdown, has also sown concern across sectors due to its hidden implications.

The new legislation quietly added to the landmark funding bill could potentially lead to the downfall of a $28 billion retail hemp industry, which employs approximately 300,000 Americans. This industry emerged after a loophole in the 2018 Farm Bill allowed products containing legal THC levels to be sold. As Senator Rand Paul noted: "The government is open, but a hemp industry shutdown has just begun." His statement reflects the broader frustration over how Congress used the shutdown to pass regulations without adequate debate.

The 2018 Farm Bill, championed by Senator Mitch McConnell, legalized the production of hemp for industrial purposes. However, a critical loophole in the legislation allowed companies to extract and sell products with sufficient THC to induce a high. This loophole led to the rise of a thriving retail hemp market but also triggered opposition. McConnell stated, "Companies have exploited this loophole by creating intoxicating substances. My efforts to close this loophole are part of the appropriations package."

The potential economic consequences of this ban are significant, with fears that it could wipe out an entire industry and lead to the loss of 300,000 jobs. These fears may have contributed to Thursday's 2.63% drop in Bitcoin's price, alongside other market factors such as concerns over an AI-driven bubble, interest rate uncertainty, and the recent government shutdown. Senator Paul criticized the decision harshly, saying, "This is the most thoughtless, ignorant proposal to an industry that I’ve seen in a long time."

As of the time of writing, Bitcoin's price stood at $98,655.49, reflecting a 2.87% weekly drop, with trading volume jumping 45.41% to $92.65 billion. The market capitalization also fell below the $2 trillion threshold, landing at $1.96 trillion. Despite the sell-off, Bitcoin increased its dominance in the market by 0.39% to 60.15%. Additionally, liquidations surged, with a total of $235.80 million liquidated, of which long investors suffered the most, losing $200.47 million.

• Why did Bitcoin fall below $100K?
  The decline is partly linked to a surprise hemp ban included in the new U.S. funding bill.
• What does the new ban do?
  It closes a loophole from the 2018 Farm Bill, restricting the sale of hemp products with intoxicating THC levels.
• How big is the potential economic impact?
  The ban could endanger a $28 billion industry and 300,000 U.S. jobs, sparking market-wide fears.
• What are other factors weighing on Bitcoin?
  Persistent concerns about an AI bubble, interest rate uncertainty, and a recent government shutdown are contributing to market pressure.