Markets
Bitcoin surpasses US$ 72 thousand, Ether rises with optimism from Dencun update
Key Takeaways
- Bitcoin reached an all-time high above $69,000 last week and rose above $72,000 on Monday morning as spot bitcoin ETF activity remained high.
- MicroStrategy bought more bitcoin, boosting its shares, while Blackrock’s spot bitcoin ETF IBIT continues to see large inflows.
- After the SEC announced a deal with former cryptocurrency exchange ShapeShift, two of the agency’s commissioners questioned the lack of regulatory clarity for the industry in the U.S.
- At a congressional hearing, Federal Reserve Chairman Jerome Powell indicated that the central bank is far from implementing a central bank digital currency.
- This week, some of the attention may shift from Bitcoin to Ethereum as the alternative crypto network is set to have its Dencun upgrade.
What happened in the crypto markets last week?
Bitcoin (Bitcoin) passed yet another price milestone, surpassing $72,000 this morning, due to the price dynamics of the past week, where it reached two all-time highs. Meanwhile, Ether rose steadily, surpassing $4,000 amid optimism surrounding lower fees following the long-awaited Dencun upgrade to the Etherum network – which will help improve transaction processing speeds at scale – this Wednesday .
Meanwhile, two SEC commissioners explained their displeasure with the way the crypto industry has been regulated in the US, and Federal Reserve Chairman Jerome Powell made it clear that there are no immediate plans to launch a central bank digital currency (CBDC) to the US dollar.
Bitcoin reaches new all-time high thanks to ETFs
The launch of Spot bitcoin ETFs in the US, as well as the next reduce by half event, were credited for bitcoin’s recent rally to multiple all-time highs. Although after each of the highs, the largest cryptocurrency by market cap fell significantly before recovering some of those gains.
On Monday, bitcoin surpassed $72,000, possibly amid optimism surrounding the UK regulator’s softening stance on allowing the cryptocurrency exchange-traded notes (ETN) in the country.
“The Financial Conduct Authority will not oppose applications from recognized investment exchanges (RIEs) to create a UK-listed market segment for cryptocurrency-backed exchange-traded notes (cETNs). These products would be available to professional investors such as investment and credit companies, institutions authorized or regulated to operate only in financial markets,” the London Stock Exchange said in a statement.
Blackrock Bitcoin ETF and MircoStrategy are big buyers of Bitcoin
In recent months, Blackrock’s iShares Bitcoin Trust (I BITE) became a major hub of bitcoin trading activity as its bitcoin supply grew temporarily larger than that of MicroStrategy (MSTR) last week. However, MicroStrategy announced the acquisition of an additional 12,000 bitcoins on Monday, bringing its current balance to 205,000.
Additionally, the nine new ETFs have grown to a combined size larger than the Grayscale Bitcoin Trust (GBTC), according to BitMEX Research. GBTC has seen more than $10 billion in outflows since converting to an ETF. Notably, Grayscale’s offering has much higher fees at 1.5% than the other nine spot bitcoin ETFs currently on the market.
Bitcoin Price Driving Gains for Some Crypto-Related Stocks
MicroStrategy’s bet on buying bitcoin is yielding spectacular results. MicroStrategy shares were up 16% to about $1,650 in early afternoon trading Monday. The stock is up more than 600% in the past year and is up about 140% since the start of 2024.
According to MircoStrategy’s executive chairman, Michael Saylor, the company’s shares are a good option for investors seeking exposure to bitcoin.
“If you are curious about bitcoin now and want to buy bitcoin at all-time highs, how can you take advantage of bitcoin with loss protection? MicroStrategy sold $800 million in debt and we have $12 to $13 billion worth of bitcoin on the balance sheet,” Saylor told CNBC in an interview on Monday. “If you’re a bitcoin maximalist and you love bitcoin and you want it to last forever, ETFs charge 25 basis points, MicroStrategy is accumulating – we’re giving you a yield on your shares in a tax-efficient way.”
Coinbase (COIN) is another stock that benefits from the rise in bitcoin. Despite crashes due to huge trading volumes In recent weeks, shares of the cryptocurrency exchange have risen more than 15% in the past five days and have gained about 70% year-to-date.
SEC Commissioners Criticize Agency’s Crypto Stance
O Security and Exchange CommissionThe SEC’s (SEC) action against former digital asset trading platform Shapeshift was criticized by the regulator’s own commissioners.
Although ShapeShift agreed to pay $275,000 for allegedly facilitating trades of unspecified digital assets considered securities, SEC Commissioners Hester Peirce and Mark Uyeda questioned the lack of clarity regarding which tokens were considered securities. They argued that the ambiguity makes it difficult for crypto companies to discern regulatory compliance, potentially stifling innovation.
“Cases like this do not protect investors; they intimidate innovators and entrepreneurs,” said Peirce and Uyeda. “We respectfully disagree.”
The commissioners’ statement echoes the frustrations of companies like Coin base It is Krakenwho were also sued by the SEC for operating unregistered securities exchanges.
Fed Chairman Powell says there is no reason to worry about CBDC
During congressional testimony last week, Federal Reserve Chairman Jerome Powell addressed concerns surrounding the potential development of a US CBDC.
“We are no closer to recommending or adopting any form of central bank digital currency,” Powell said.
Powell aimed to put to rest speculation that a CBDC could allow the Fed to compete directly with private banks or monitor personal financial transactions, emphasizing that any digital currency efforts would work through the existing banking system. His remarks come amid legislative efforts to prevent the Fed from issuing a CBDC without congressional approval, reflecting ongoing debates over privacy and the implications of central bank-backed digital currencies on the financial landscape.
What to expect from the Ether network upgrade
Ether (ETH) has now reached $4,000 for the first time since December 2021, as the network is set to undergo an upgrade, known as Deneb-Cancun or Dencun, this week. Ether rose more than 4% on Monday and has gained more than 70% year to date.
According to Fidelity Digital Assets, the upgrade is expected to drastically reduce fees on several layer-two network protocols that were built on top of the core Ethereum blockchain.