Bitcoin
and other cryptocurrencies have so far shrugged off a major regulatory crackdown on the digital asset space, with an absence of sellers after more than a year of a brutal bear market helping cryptos rise in the face of intense pressures.
The price of Bitcoin has jumped 3.5% over the past 24 hours to $26,650, rebounding from depths below $25,500 reached on Tuesday after the Securities and Exchange Commission filed a lawsuit against crypto broker
Coinbase Global
(ticker: COIN). The largest digital asset steadied as Wednesday trading got underway, returning to the zone between $26,000 and $27,000 that has dominated for weeks since Bitcoin slipped back from a 10-month peak above $30,000 in April.
“Yesterday’s strong buying has somewhat lowered the temperature of concerns about the near-term outlook for the price. It was back above the 200-week average and within the closing ranges of the last four weeks,” said Alex Kuptsikevich, an analyst at broker FxPro. “Nevertheless, a wait-and-see approach now seems more prudent as Bitcoin has yet to prove its ability to gain further strength. A significant bullish signal would be a surpass of $27,500.”
It is remarkable that Bitcoin has shaken off what looks to be one of the biggest U.S. regulatory crackdowns on crypto, with the SEC charging Binance—by far the world’s largest token exchange—and Coinbase with securities violations this week.
The latest development came late Tuesday, with an emergency filing from the SEC seeking a temporary restraining order freezing assets held for the benefit of Binance.US customers. Binance.US, ostensibly an independent American crypto exchange, was charged alongside Binance and its founder, Changpeng Zhao, on Monday.
The move by the SEC is a bid “to ensure that Binance.US customers’ assets are protected and remain in the United States through the resolution of the SEC’s pending litigation of this matter.” Binance.US said via Twitter that users assets are safe and that the platform continues to be operate, calling the filing “unwarranted and based more on the SEC Staff obtaining an advantage in litigation versus genuine concern.”
Why haven’t cryptos crashed in the face of these intense regulatory pressures?
Market observers point to crypto already enduring more than a year of a brutal bear market, which has pushed the space’s market capitalization to $1.1 trillion from nearly $3 trillion. These conditions already likely have pushed out any would-be sellers, leaving only committed capital in the ecosystem. Bitcoin hit its trough below $16,000 in the wake of crypto exchange FTX’s shock bankruptcy last November, which may have been the final capitulation event for traders that might have sold.
“It’s hard to overstate how difficult the regulatory climate is in the United States right now, but it seems as though most of the ammunition has been fired off,” said Bob Ras, the co-founder of trading platform Sologenic. “If Bitcoin can remain as buoyant as it has been during this moment in time in particular, then it’s hard for me to imagine us hitting a new bottom for this four-year cycle. There just aren’t that many sellers left, especially after the wipeouts that occurred in 2022.”
Beyond Bitcoin,
Ether,
the second-largest crypto, was up 2.5% to above $1,850. Smaller cryptos or altcoins—a class of token that has borne the brunt of much of the latest regulatory scrutiny—were weaker, with
Cardano
and
Polygon
dropping 4% each. Memecoins were more mixed, with
Dogecoin
gaining 3% but
Shiba Inu
shedding 1%.
Write to Jack Denton at [email protected]
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