Bitcoin rises to highest level since last summer

The price of Bitcoin has risen steadily since the beginning of the year. On Thursday, the cryptocurrency climbed to its highest level since last August. Since the lows late last year, crypto key currency is up nearly 60 percent.

While investors in the financial markets are still worried about inflation and higher interest rates, the optimism in the cryptocurrency markets seems to have returned for good. And this despite the fact that the US Securities and Exchange Commission (SEC) has taken a much sharper tone towards the crypto world in recent weeks.

On Thursday evening, bitcoin surged well above USD 24,000 for the first time since August 2022 and was trading at USD 24,595 in the morning. A double-digit percentage increase of more than 11 percent in the last 24 hours alone. Since the beginning of the year, the gain is more than 48 percent.

Last year, Bitcoin temporarily traded for less than $15,500 in the wake of the collapse of the FTX crypto exchange. And compared to a year ago, the most famous cryptocurrency is still about 44 percent in the red.

The regulatory burden is increasing

Regulatory action by the US Securities and Exchange Commission (SEC) has recently created uncertainty in the crypto market. Given the threat of stricter regulation from the US, a new “bull run”, as price explosions are called, is not very likely, say some market observers.

These have less impact on Bitcoin itself than stablecoins and staking services. This refers to blockchain currencies pegged to US dollars (stablecoins) and depositing crypto assets to generate returns (staking).

SEC intervenes

At the end of last week it was announced that the American crypto exchange Kraken had yielded to pressure from the SEC. She dropped the strike-as-a-service offer after allegations of violating U.S. securities laws and paid a $30 million fine.

In the current week, the SEC also announced a lawsuit against the stablecoin provider Paxos. Paxos offers crypto exchange Binance’s USD-pegged stablecoin BUSD. The SEC called BUSD an “unregistered security” in the indictment. “The SEC’s war against the crypto world has begun,” wrote market analyst Marcus Sotiriou of digital asset broker GlobalBlock.

Does regulation bring safety?

All in all, bad news for the crypto sector, which is still unregulated in many areas. Tighter regulation after the FTX debacle could also lead to more institutional investors in the crypto market, according to some market observers.

“Although the official measures continue to cause unrest,” says analyst Craig Erlam of broker Oanda. But the relief that the worst is behind the industry is not only felt by private investors.

“The actions of the SEC and other global regulators are by no means bad news for cryptocurrencies,” said Tim Frost, CEO of digital asset platform Yield App. In this way, the authority also creates ‘urgently needed clarity’.

Ether goes up

The turmoil around Kraken and Paxos doesn’t seem to hurt blockchain currencies like Ether and Co., which are more affected by the regulatory projects. The second-largest cryptocurrency by market capitalization has gained about 8.7 percent in the past 24 hours and is now back at $1683 in a weekly comparison.

The total market capitalization of all nearly 12,400 cryptocurrencies listed on the CoinGecko portal totaled $1165 billion on Thursday. The record value of nearly three trillion dollars from November 2021 is still a long way off. (rbu/sda/awp)