By
Steve Muchoki
April 29th, 2024
Bitcoin (BTC), the world’s largest cryptocurrency, reached its highest price since June 2022, touching $31,818 on the Bitstamp exchange.
Cryptocurrencies witnessed a remarkable spike reaching new yearly highs in a remarkable overnight rally. This surge comes as a result of the favorable decisions bordering on the legal battle between the United States Securities and Exchange Commission (SEC) and blockchain payments firm, Ripple Labs Inc over the status of XRP.
The spike in buyups helped in breaking the prolonged uncertainty that had gripped the market for months in the name of crypto winter.
A Shifting Regulatory Landscape
Matthew Dibb, the Chief Investment Officer at crypto asset management firm Astronaut Capital explained that the regulatory environment is changing. “Based on what we’ve seen in the last 24 hours, it may be for the better,” he said.
According to reports, Bitcoin (BTC), the world’s largest cryptocurrency, reached its highest price since June 2022, touching $31,818 on the Bitstamp exchange. This surge reflects a significant upswing of over 90% for the year so far and nearly 30% in just a month, defying earlier predictions of a prolonged market slump.
Ethereum (ETH), the second-largest token by market capitalization also saw a significant increase, recording its best session since March. Several factors have contributed to this resurgence. Regulatory clarity and increased institutional involvement have played a crucial role in revitalizing the market.
The recent court ruling regarding Ripple’s XRP tokens has provided much-awaited regulatory clarity for Ripple stakeholders, according to Justin d’Anethan, Head of Business Development in Asia at Keyrock, a digital assets market maker in Hong Kong. While the language used in the ruling may still be somewhat ambiguous, the finding that XRP tokens sold on public crypto exchanges are not considered securities under the law is seen as a potentially influential precedent.
The court ruling spurred a spike in smaller cryptocurrencies known as “altcoins”. Tokens such as Solana (SOL), Polygon (MATIC), and Stellar (XLM) saw price gains of 15% to 50%. Also, shares of Coinbase Global Inc (NASDAQ: COIN) soared 24% to reach a yearly high.
Furthermore, the development of innovative financial products, such as Bitcoin Exchange-Traded Funds (ETFs), has also attracted new investors and increased market liquidity.
Legal Battles Causing Uncertainty in the Industry
The market witnessed a protracted period of gloomy sentiment during the crypto winter, with prices plunging and investor confidence dwindling. The collapse of the FTX Exchange further intensified the negative sentiment and raised concerns about the security and stability of crypto platforms. This challenging environment led to a prolonged period of stagnation and uncertainty for the sector.
Furthermore, Coinbase and Binance are facing lawsuits from the SEC. These legal challenges have created uncertainty and potential setbacks for the market.
Despite the legal challenges and market setbacks, the recent positive news surrounding cryptocurrencies has sparked optimism. BlackRock Inc (NYSE: BLK) filed to launch a Bitcoin ETF, and Cboe, a leading exchange operator, refreshed its filing for a similar fund to be managed by asset manager Fidelity Investments.
Chris Weston, Head of Research at Brokerage Pepperstone, notes that after a prolonged period of negative news, the industry is now experiencing a consistent stream of positive developments, creating momentum and improving market sentiment.