Cryptocurrency prices end a week higher in New York as the market benefits from an incursion from traditional finance players as the US government cracks down on major pioneers in the digital asset industry.
The value of all crypto tokens was around $1.25 trillion as of late afternoon, according to CoinGecko, up nearly 12% for the week and 51% for the year. Market leader BitcoinBTC (BTC) was quoted at $30,889, up 2.5% in the previous 24 hours and 20% for the week, while the No. 2 crypto ether (ETHETH) rose edged up 0.8% to $1,901, taking its seven-day gain to 14%.
Two forces appeared to be driving prices. The first was the previous week's announcement that BlackRockBLK, the world's largest asset manager, was seeking approval to list an exchange-traded fund (ETF) for bitcoin in the spot market. The Securities and Exchange Commission has repeatedly refused to accept such funds, even though it allows ETFs based on futures contracts, saying the latter are less susceptible to market manipulation. BlackRock has taken steps to make its offer seem acceptable to the SEC, but when such a powerful company is struggling to prepare a listing in a new category after several competitors have been turned down, the time for the idea is probably right. .
The proof can be seen in the large number of smaller ETF sponsors who quickly followed in BlackRock's wake by offering their own spot bitcoin funds, including InvescoIVZ, WisdomTree and Valkyrie Investments. Cash market ETFs could broaden demand for bitcoin by offering the convenience of stock trading to the type of investors who are hesitant to get involved with crypto wallets, seed phrases, and the risk of hacking. Mutual funds run by professional managers may run counter to the individualistic philosophy of many first-time buyers of digital assets — those who subscribe to the motto "not your keys, not your crypto" — but that hasn't stopped the earnings of the week.
The other development supporting the market was the announcement of the opening of EDX, a cryptocurrency exchange for institutions. Backed by traditional finance heavyweights including Charles Schwab, Citadel, Fidelity, and Sequoia Capital, the exchange offers four cryptos to trade: bitcoin, ether, litecoin, and bitcoin cash. It differs from well-established competitors by operating on a non-custodial model which prevents it from taking ownership of the assets it lists.
“It appears that despite a choppy SEC, many of the biggest players in the US Financial Services Hall of Fame are still very bullish on crypto-planning for new spot ETFs and investments in ecosystem infrastructure,” Bradley Duke, co-CEO of ETCETC Group, which provides exchange-traded crypto products in Europe, said Forbes by email. “That had the effect of boosting investor sentiment.”
The improved outlook comes after early June crackdowns on Binance and Coinbase, the two largest cryptocurrency exchanges. The SEC has filed civil complaints against the two for acting as unlicensed exchanges and listing cryptocurrencies it deems unregistered securities, further accusing Binance of engaging in "a multi-tiered scheme steps to surreptitiously evade US laws".
The question of which cryptos are securities and which are commodities and whether a single currency can be each at different times is unsettled, although bitcoin appears to be beyond the reach of the SEC.
Crypto prices fell in the days following the lawsuits, with the market value hitting a nadir of around $1.06 trillion on June 13. The June 15 news from BlackRock sparked a rally that gained momentum this week.
One of the big winners in the current surge is bitcoin cash, which is up 31% on Friday and 66% for the week. Its inclusion in EDX's inaugural listing was the catalyst for this rise, Greg Moritz, co-founder of crypto hedge fund AltTab Capital, said. Forbes by email.
“With the recent launch of the institutional exchange EDX, Bitcoin Cash has been in the spotlight,” he wrote. saw a spike in open interest as traders anticipate a large influx of institutional capital into BCH, a project that until now had rather bleak long-term prospects. »
Bitcoin cash is built on the same blockchain as bitcoin, but it can process transactions much faster. This makes it faster and cheaper to use, but at the potential cost of security.
LitecoinLTC, the fourth currency listed on EDX – which, like bitcoin cash, is an offshoot of bitcoin – rose 5.4% on Friday and 19% for the week.
On Wall Street, crypto mining stocks posted notable gains. Marathon Digital was up 7.4% for the day and 27% for the week, Hive Blockchain gained 7% (29%) and Hut 8 Mining 5% (27%).
Coinbase posted a daily gain of 6.9% and is up 11% for the week. The trade is also 4.7% above where it was before the SEC's June 6 lawsuit announcement.
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