Pakistan Legalizes Cryptocurrency, Bitcoin Surges 3%

On 20 March 2025, Pakistan made a historic announcement by legalizing cryptocurrency, a move that sent shockwaves through the global financial markets. Within an hour of the announcement, the price of Bitcoin surged to $65,000, while Ethereum (ETH) gained 2.5% to reach $3,800. This regulatory shift sparked a significant increase in market activity, with Bitcoin's trading volume jumping dramatically to 12 billion USD, marking a 40% increase from the 24-hour average prior to the announcement. The surge in interest among investors also led to a noticeable increase in trading volumes for altcoins such as XRP and Cardano (ADA).

Pakistan's decision to legalize cryptocurrency comes at a time when global markets are closely watching regulatory developments in the crypto space. The news was met with immediate enthusiasm, as the market returned to a bullish trend. Bitcoin's price surged by 3%, and Ethereum saw a 2.5% jump, indicating a growing comfort level among investors. The BTC/PKR pair experienced a 50% volume increase to 100 million USD, while ETH/PKR rose by 45% due to heightened domestic interest. This regulatory clarity has led to a surge in market participation, with altcoins like XRP and Cardano (ADA) seeing trading volume increases of 20% and 15%, respectively. Stablecoins also benefited, with USDT/PKR volumes rising by 30%, reflecting a shift towards more stable and liquid trading environments.

The positive market sentiment was further supported by key technical indicators. Bitcoin's Relative Strength Index (RSI) climbed from 60 to 68 within an hour, indicating strong buying power. Ethereum's Moving Average Convergence Divergence (MACD) chart recorded a bullish crossover at 11:45 AM UTC, suggesting additional upward momentum. On-chain data also showed an increase in Bitcoin's average transfer value by 15%, indicating higher activity from larger investors, potentially including institutions. The Bitcoin network's hashrate also saw a slight uptick of around 2%, suggesting an increase in mining activity driven by improving market conditions.

Pakistan's move to legalize cryptocurrency aligns with its broader economic reforms aimed at fostering financial innovation. As the use of physical cash declines and the fintech sector expands, legalizing digital currencies is a practical step towards modernizing the financial landscape. The country is also exploring regulatory measures to prevent illegal activities and promote secure and transparent trading environments. This decision comes amid Pakistan's economic challenges, including inflation and a weak currency. By legalizing cryptocurrency, Pakistan aims to attract foreign investment and provide an economic alternative for its unbanked population, thereby integrating them into the formal economy.

Pakistan's decision to embrace cryptocurrency positions it as a progressive nation welcoming the digital revolution. This move is part of a broader global trend towards cryptocurrency adoption, as countries seek to become regulatory-friendly and capitalize on the growing digital economy. The immediate impact of this decision includes price surges and increased trading volumes. However, the long-term implications are even more significant. Higher trading volumes and well-defined regulatory frameworks could attract professional investors, enhancing liquidity and reducing price volatility over time. The significant progress seen with BTC/PKR and ETH/PKR pairs suggests that Pakistanis will continue to enter the crypto market in the long term.

Additionally, the integration of AI-based trading algorithms could play a crucial role in shaping the future of the crypto market. While Pakistan's decision was not preceded by any specific AI-related announcement, recent trends showed a 10% increase in trading volumes driven by AI. As regulations mature, this technological integration could become more mainstream, allowing for more advanced trading strategies. Overall, Pakistan's legalization of cryptocurrency marks a pivotal moment in the global crypto landscape, setting a precedent for other nations to follow suit and embrace the digital currency revolution.