Cryptocurrency Reaches One-Year High as It Recovers From Controversies
Despite numerous challenges faced by the digital asset industry, Bitcoin has reached its highest level in a year, driven by renewed enthusiasm for cryptocurrencies.
The native digital currency surpassed $31,013, its 2023 peak, to its highest level since June 2022, Bloomberg data shows. The rise has taken Bitcoin as high as $31,410 and up nearly 90% since the start of the year. Other cryptocurrencies followed suit with Ether.
It’s a significant development — and a sign of resilience — in a market that many had written off as extinct following a series of high-profile and high-profile scams and corporate collapses that shamed the industry among investors.
“From an ardent Bitcoiner’s point of view, your most fundamental investment in the token is underway: inflation, monetary mismanagement, banking crises, sovereign debt distress, questions about the status of the U.S. dollar reserve are all contributing to Bitcoiners having an ‘I told you so’ moment,” said Strahinja Savic, FRNT Financial’s data- and head of analytics. “I wouldn’t describe a rally to new all-time highs despite the challenging environment, but rather because of it.”
Recently, news of BlackRock Inc’s shock application for a US Bitcoin exchange-traded spot fund has reignited enthusiasm for crypto oversight, with some in the market hoping that such a product – which currently does not exist – will win approval from regulators. Approval—regardless of the odds—would mean a win for fans who have longed for such an investment product for years.
“BlackRock’s exit is big news for Bitcoin, given its close relationship with regulators and very strong ETF approval,” wrote K33’s Bendik Schei and Vetle Lunde. “It’s also worth noting that BlackRock wouldn’t be devoting time and resources to this application if they didn’t see the likelihood of BTC’s long-term strength, and therefore strong earnings, being significantly high.”
They added: “Approval would have a profound impact on Bitcoin’s market structure as it would reduce barriers for financial advisors to offer exposure to BTC through an accessible investment vehicle with daily creations and redemptions delivered by a trusted issuer.”
Other recent news also bolstered crypto-believers’ faith in the rally. A new crypto exchange backed by firms including Citadel Securities, Fidelity Digital Assets and Charles Schwab Corp. — called EDX Markets — said it has gone live. And among other news, JPMorgan Chase & Co. extended one of the most significant projects to bring blockchain technology to traditional banking by introducing euro-denominated payments for business customers using its JPM Coin.
“The effects of the so-called crypto winter appear less permanent today than they did a year ago, as multiple jurisdictions and institutional players continue to embrace crypto-related initiatives,” David Duong, head of research at Coinbase, said in a recent note. .
On Twitter, where there is a lot of crypto discourse, several users are citing FOMO – or fear of being left out – as part of the recent price rally, with some investors jumping into the market because they see others benefiting from it. about the demonstration and want to participate in it.
But the fact that the industry faces tough regulatory scrutiny hasn’t faded, despite all the new hype about rising prices.
The SEC has turned its attention to the crypto space in the wake of last year’s spate of scams and once-lauded companies like FTX and several lenders. It has led to a mass exodus of private investors in particular, who have collectively lost billions of dollars as a result of the revelations and explosions.
Trading volumes have dried up as a result. In May, combined spot and derivatives trading on centralized exchanges fell more than 15% to $2.4 trillion, according to CCData. Spot trading alone fell nearly 22 percent to $495 billion, the lowest monthly reading since March 2019, the researcher said in a report.
“People are speculating that BlackRock’s power in the financial markets will help them get approved. I’m not quite there yet,” said Michael O’Rourke, chief market strategist at JonesTrading. “The SEC has been aggressively cracking down on the crypto space, it seems like it’s a little early for that kind of view.”
