TOPLINE
Bitcoin rose sharply Wednesday and surpassed $30,000 for the first time in months, continuing a days-long increase in the cryptocurrency’s price, despite economic uncertainty and a regulatory crackdown on some crypto exchanges.
KEY FACTS
Bitcoin’s price rose as much as 9.8% on Wednesday, peaking at $30,749.45 at around 12:35 p.m. ET, the first time Bitcoin has topped the $30,000 mark since mid-April.
As of 2:30 p.m. ET, bitcoin was trading at $30,222.52.
The surge Wednesday extended a rally that has caused bitcoin prices to shoot up almost 20% over the last week, along with a smaller 13% jump in ethereum.
Bitcoin took a dive just last week, when the price fell below $25,000 for the first time since March, amid lawsuits from regulators against Binance and Coinbase and after the Federal Reserve announced it would not hike interest rates this month but could return to aggressive increases later in the year, both of which led to uncertainty about what the market’s future would look like.
KEY BACKGROUND
Bitcoin’s price has nearly doubled since last December, when the cryptocurrency industry was left reeling from the collapse of exchange FTX and arrest of its founder, Sam Bankman-Fried, on fraud charges. Since then, several other crypto firms have faced scrutiny from regulators. Prices of bitcoin are still well below their all-time peak of more than $64,000 in late 2021.
TANGENT
The recent increase in bitcoin prices came six days after BlackRock, the world’s largest money manager, requested to register a spot-market bitcoin ETF, despite the U.S. Securities and Exchange Commission not yet approving any applications for spot bitcoin ETFs. The ETF would own bitcoins that are held in custody by Coinbase, the largest U.S.-based crypto exchange. In the past, the SEC has rejected ETF applications and said the product is not safe enough to be sold to investors and that prior applicants hadn’t proven they could prevent fraud and protect investors, CNBC reported. Meanwhile, a crypto exchange backed by Fidelity, Charles Schwab and Citadel Securities launched this week.
CONTRA
U.S. regulators of late have been cracking down on crypto firms and several have been hit with civil lawsuits, leading some to question the timing of BlackRock’s application. The request came just one week after the SEC sued Coinbase, alleging the platform had been operating an unregistered broker since at least 2019. Just one day earlier, the SEC also sued Binance, another crypto exchange, for allegedly misusing customer funds.
FURTHER READING
Bitcoin Drops To 3-Month Low Following Fed Rate Decision (Forbes)