Regulatory Fog Begins to Clear, Signs ‘Crypto Winter’ Is Over

SINGAPORE: Cryptocurrencies were testing year-to-date highs on Friday as a series of favorable regulatory and investment moves began to turn the market momentum that had been stuck in a rut for months.

Bitcoin traded overnight at its highest price since June 2022, reaching $31,818 on the Bitstamp exchange. So far, it’s up more than 90% for the year, and nearly 30% for the month.

Ether, the second-largest token, posted its highest trading since March, while Ripple jumped 73% after a U.S. judge ruled it could legally be sold on public cryptocurrency exchanges.

“The regulatory environment is changing,” said Matthew Dibb, chief investment officer at crypto manager Astronaut Capital. “And from what we’ve seen in the last 24 hours, things could get better.”

Ripple’s ruling comes in conjunction with fraud charges against the former president of bankrupt cryptocurrency financial firm Celsius Network, following the entry into the market by financial firms BlackRock and Fidelity.

Investors claim it’s causing mood swings.

“Ripple officials have been waiting for regulatory clarification, and yesterday the court seems to have shown just that,” said Justin Danethan, head of business development for Asia at Keylock, a Hong Kong-based digital asset market maker. Stated.

He said the wording remains somewhat opaque, but the finding that XRP tokens sold on public cryptocurrency exchanges are not legal securities “probably serves as a precedent.”

Tokens like Solana, Matic, and Stellar rose 15% to 50%, while exchange Coinbase stock rose 24% to a one-year high, sparking a rally in smaller cryptocurrencies called ‘altcoins’. became.

“If a centralized crypto project weren’t a security, then the Commodity Futures Trading Commission might be more likely to become the industry’s primary regulator. It will,” said Greg Moritz, the company’s chief operating officer. Crypto hedge fund Alt Tab Capital.

He said the upcoming lawsuit will likely shed more light on how courts treat private cryptocurrency offerings.

Traders said altcoins have seen low liquidity, while bitcoin and ether are steadily improving. Coinbase shares hit a 14-month high on Thursday, adding to the importance of the stock’s more than doubling in a month.

Momentum

Crypto assets are currently trading near or above levels seen last November when the FTX exchange collapsed, sending the sector into what it called “crypto winter.”

FTX collapsed after surging withdrawals, exposing customers to losses due to its failure, let’s curb the sector, especially to protect smaller investors tempted by quick returns It has added momentum to global regulatory efforts to

China has almost banned cryptocurrencies. U.S. investigators investigating FTX have accused founder Sam Bankman-Fried of billion-dollar fraud charges, but he has pleaded not guilty.

Celsius founder Alex Mashinsky also pleaded not guilty to his own charges on Thursday, but certainly many other legal challenges remain pending, with market setbacks expected. .

Coinbase and its larger rival Binance are facing lawsuits from the SEC, and in Binance’s case from other regulators as well. An SEC executive said last month that the industry has a “spirit built around violations of the law.”

The entry of traditional financial businesses into cryptocurrencies, bringing in billions of dollars, evokes memories of Larry, who helped Bitcoin rise by 300 percent in 2020.

BlackRock, the world’s largest asset manager, last month applied to launch a Bitcoin exchange-traded fund, and in early July, exchange operator Cboe applied for a similar fund run by asset manager Fidelity. updated.

“We’ve been consistently putting negative news out there for a long time to make the industry look pretty dirty,” said Chris Weston, head of research at brokerage Pepperstone in Melbourne.

“For the first time in a long time, we have consistently positive news coming in, which means the momentum is there.”

(Additional reporting by Vidya Ranganathan from Singapore; Editing by Simon Cameron-Moore)