Bitcoin wins as crypto unsubdued by latest regulatory crackdown

(Bloomberg) – Bitcoin resumed its push toward $30,000 and smaller digital tokens rallied as a broad renewal in risk appetite prompted investors to play down a growing regulatory crackdown.

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The oldest cryptocurrency gained as much as 5.2% to trade around $28,812. Bitcoin traded just under $29,000 on Wednesday until the Federal Reserve raised rates as expected. The token, which has not traded at $30,000 since June, has jumped around 70% this year.

“It’s basically an asset that trades on sentiment,” Que Nguyen, Research Affiliates CIO of Equity Strategies, said in an interview at Bloomberg’s New York headquarters. “One of the things that I find curious about crypto is that nobody really does anything with it. If there’s anything to do with it that affects the real economy, then this will be really big. But if it’s not, then it’s going to be confined to this circle of enthusiasts.

Coinbase Global Inc. revealed on Wednesday that it has received a notice from the Securities and Exchange Commission formally declaring the regulator’s plans to take legal action against the largest crypto exchange in the United States. In a separate action on Wednesday, the SEC sued crypto mogul Justin Sun for allegedly violating securities rules. Sun said the complaint was unfounded.

Among so-called altcoins, Cardano jumped 5.3%, Avalanche rose 6.3%, and Litecoin rose 7.7%. TRX, the token associated with the Tron network that Sun launched, rose around 7.8% after falling 12% on Wednesday.

Bitcoin “essentially follows the broader markets, digests the Fed and essentially reduces some of the damage done yesterday,” said Ilan Solot, co-head of digital assets at Marex.

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“The crypto market seems to have had a similar view to the bond market heading into the Fed meeting, that there was an overwhelming probability of a 25 basis point upside and a low probability of a stay put,” said Stéphane Ouellette, Managing Director of Institutional Crypto. brokerage firm FRNT Financial.

The crypto rebound follows an overall rally in the stock market, where the tech-heavy Nasdaq 100 is leading the gains. This index – which crypto tokens have performed similarly with in the past – is up 17% so far this year, and many analysts still report that the two often trade in tandem. Although the correlation between the two had weakened at the start of the year, it has strengthened as the two have rallied in the wake of the banking sector turmoil.

Read more: Record demand for derivatives is fueling Bitcoin’s resurgence

“The decision is notable but not excessive,” said Chris Newhouse, a derivatives trader at crypto investment firm GSR. “A move below $25,000 or above $30,000 would likely have resulted in increased volume in the derivatives markets and more speculative betting would begin to take place.”

–With help from Carly Wanna and Vildana Hajric.

(Updates with Nguyen’s commentary; price updates throughout.)

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