Bitcoin Price Close to 13-Month Peak as Ripple Ruling Boosts Investor Confidence
On Friday, Bitcoin was nearing its peak for the year as crypto investors found optimism in a legal triumph where XRP, a cryptocurrency, was determined to not be a security.
A US judge said on Thursday that Ripple Labs Inc did not violate securities laws by selling its XRP token on public exchanges.
The case is the cryptocurrency company’s first victory in a lawsuit brought by the US Securities and Exchange Commission. Although the decision was case-specific, it triggered a wave of optimism among crypto-investors that more cryptocurrencies cannot be considered securities either.
Still, some enthusiasm was tempered by a report from the Wall Street Journal that Binance, the world’s largest cryptocurrency exchange, has laid off more than 1,000 people in recent weeks. Layoffs will continue and may lead to the stock exchange losing more than a third of its staff, the report states, citing a person familiar with the matter.
Bitcoin hit its highest price since June 2022 earlier, touching $31,818, before falling to around $30,935 at 1730 GMT on Friday.
The second-largest tokenizer had its best session since March on Thursday, with XRP, which a US judge ruled can be legally sold on public crypto exchanges, rallied 73% on Thursday and parlayed most of those gains into Friday.
“The regulatory environment is changing,” said Matthew Dibb, chief investment officer at crypto asset manager Astronaut Capital. “And based on what we’ve seen in the last 24 hours, it could be better.”
Justin d’Anethan, director of business development for Asia at Hong Kong digital asset market maker Keyrock, said that XRP tokens sold on public crypto exchanges were not securities under the law “probably serves as a precedent.”
“Ripple’s stakeholders were waiting for regulatory clarity. Yesterday, the court appears to have provided just that,” he said.
Following the decision, several major cryptocurrency exchanges, including Coinbase and Bitstamp, continued to trade XRP on their platforms after suspending trading of the token in 2021 due to the SEC lawsuit. Binance.US announced on Friday that it has also allowed XRP trading on its exchange.
Coinbase, which was sued by the SEC last month for alleged violations of securities laws, saw its stock jump nearly 25% on Thursday as investors hoped the ruling in the Ripple case would bode well for Coinbase.
SLOW RECOVERY
Cryptocurrencies have made a gradual recovery so far this year, after prices plummeted last year and the bankruptcies of several major cryptocurrencies, including crypto exchange FTX, left investors with heavy losses.
The collapse of FTX added momentum to global regulatory efforts to rein in the industry, particularly to protect retail investors lured by quick returns.
China has completely banned crypto. US investigators harassing FTX have accused founder Sam Bankman-Fried of a multi-billion dollar fraud, to which he has pleaded not guilty.
Alex Mashinsky, the founder of bankrupt crypto lender Celsius, was charged with fraud for misleading customers and artificially inflating the value of the company’s token, according to a US indictment unsealed Thursday. He pleaded not guilty.
Meanwhile, Coinbase and larger rival Binance face lawsuits they dispute from the SEC and, in Binance’s case, other regulators.
A top SEC official said last month that the industry has an “ethos based on non-compliance.”
At Binance, the layoffs reported by the Wall Street Journal come as a number of executives have recently left the company, including chief strategy officer Patrick Hillmann. Hillmann confirmed on Twitter that he was leaving the stock exchange citing personal reasons.
Still, crypto investors have received encouragement from the world’s largest asset manager, BlackRock, which filed last month to launch a bitcoin exchange-listed fund. Earlier in July, the exchange operator Cboe updated its application to manage the corresponding fund to the asset manager Fidelity.
As a risk reserve, cryptocurrencies could also benefit from a weakened dollar.
“We had gone through this long and constant negative news to make the space look pretty dirty,” said Chris Weston, head of research at Melbourne-based Pepperstone.
“However, for the first time in a while, there is consistently positive news coming in, and that means you have momentum.”
