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The world’s largest cryptocurrency rose to its highest level in more than a year, capping a week of gains after BlackRock’s foray into bitcoin exchange-traded funds and despite increasing regulations in the United States.
Bitcoin, the world’s largest cryptocurrency, topped $30,000 and hit a one-year high amid global recession fears and US regulatory scrutiny over the sector.
The recent boom in crypto assets is due to the interest of large players in the traditional financial system in Bitcoin. The largest BlackRock, the world’s largest asset manager, which filed an application to launch the iShares Bitcoin Trust, an ETF that would have Coinbase Custody as custodian and offer institutional investors exposure to the cryptocurrency.
It was then joined by cryptocurrency exchange EDX Markets, which announced earlier this week that it will allow trading in some cryptocurrencies. These moves reactivated the euphoria of investors for cryptocurrencies, after months of bad luck due to the rises in interest rates and the bankruptcy of the FTX stock exchange at the end of last year.
A regulatory campaign by the United States added to the negative sentiment. The US Securities and Exchange Commission sued cryptocurrency giants Coinbase and Binance, alleging violation of its rules, accusations both denied.
Following BlackRock’s request, Bitcoin gained nearly 25% in value. It rose to $31,458 on Friday, the highest level since June 7, 2022.
“The dark clouds overshadowing crypto have lifted in recent days amid an outburst of institutional interest,” commented Kate Laurence, general partner at Bloccelerate VC. “For entities like BlackRock, Charles Schwab, Fidelity and Citadel to jump into the cryptocurrency arena is very significant, because it shows that institutions take this space very seriously, despite recent regulatory moves,” she added.
When interest rates were low, investors poured money into the cryptocurrency market, which peaked at $3 trillion in 2021, but fell back when rates rose to curb inflation, and the market’s value is now around 1 $24 trillion, according to data from CoinGecko.
“The SEC lawsuit has created opportunities for strong, regulated players, so I’m cautiously optimistic that this BlackRock event will have some sustainability,” said Doug Schwenk, CEO of Digital Asset Research.
with Reuters
