The increase comes as a result of 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.
Bitcoin (BTC), the world’s largest cryptocurrency, reached its highest price since June 2022, reaching $31,818 on the Bitstamp exchange. Cryptocurrencies witnessed a remarkable rise reaching new yearly highs in a remarkable rally overnight.
The surge in buying helped break the lingering uncertainty that had gripped the market for months in regards to crypto winter.
A Changing Regulatory Landscape
Matthew Dibb, 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.
Bitcoin (BTC), the world’s largest cryptocurrency, has reportedly reached its highest price since June 2022, hitting $31,818 on the Bitstamp exchange. This rise reflects a significant increase of over 90% year to date and nearly 30% in just one month, defying previous predictions of a prolonged market downturn.
Ethereum (ETH), the second largest token by market cap, also saw a significant rise, posting 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 long-awaited regulatory clarity for Ripple stakeholders, according to Justin d’Anethan, Head of Asia Business Development at Keyrock, a Hong Kong-based digital asset market maker.
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 potentially influential precedent.
The court ruling caused a rise in smaller cryptocurrencies known as “altcoins.” Tokens such as Solana (SOL), Polygon (MATIC) and Stellar (XLM) saw price increases of 15% to 50%. Additionally, shares of Coinbase Global Inc. (NASDAQ: COIN) soared 24% to hit a yearly high.
In addition, the development of innovative financial products, such as Bitcoin exchange-traded funds (ETFs), have also attracted new investors and increased market liquidity.
Legal Battles Causing Uncertainty in the Industry
The market witnessed a lengthy period of gloomy sentiment during the crypto winter, with prices falling and investor confidence waning. 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.
Additionally, Coinbase and Binance are facing SEC lawsuits. These legal challenges have created uncertainty and potential setbacks for the market.
Despite legal challenges and market setbacks, the recent positive news surrounding cryptocurrencies has sparked optimism. BlackRock Inc. (NYSE: BLK) has filed an application to launch a Bitcoin ETF, and Cboe, a leading exchange trader, has updated 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 an extended period of negative news, the industry is now seeing a steady stream of positive developments, building momentum and improving market confidence.
By Audy Castaneda
