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Bitcoin (BTC) and other major cryptocurrencies surged to new 12-month highs in June on news that major financial institutions were planning big new products in the digital assets space. BlackRock and a handful of other leading U.S. asset managers made fresh appeals to the Securities and Exchange Commission to approve a new form of Bitcoin exchange-traded fund. Meanwhile, a consortium of Wall Street heavy hitters launched a brand new crypto exchange called EDX Markets. As new, more responsible crypto trading products are coming online, the SEC continued its crackdown on existing crypto exchanges, suing Coinbase and Binance. Looking ahead to the second half of 2023, crypto industry experts will continue to monitor institutional crypto activity, as well as the fluid U.S. economy and the outlook for interest rates. Featured Cryptocurrency Partner Offers1eToroLimited Time Offer Join eToro and get $10 of free Crypto! 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Ethereum prices are also up 52% so far in 2023. { "symbols": [ [ "BITSTAMP:BTCUSD|1M" ], [ "BITSTAMP:ETHUSD|1M" ] ], "chartOnly": false, "width": 1000, "height": 500, "locale": "en", "colorTheme": "light", "autosize": false, "showVolume": false, "showMA": false, "hideDateRanges": false, "hideMarketStatus": false, "hideSymbolLogo": false, "scalePosition": "right", "scaleMode": "Normal", "fontFamily": "-apple-system, BlinkMacSystemFont, Trebuchet MS, Roboto, Ubuntu, sans-serif", "fontSize": "10", "noTimeScale": false, "valuesTracking": "1", "changeMode": "price-and-percent", "chartType": "area", "maLineColor": "#2962FF", "maLineWidth": 1, "maLength": 9, "lineWidth": 2, "lineType": 0 } Inflation has trended lower in 2023, triggering a rebound in cryptocurrencies and other risk assets. Among the most popular altcoins, Solana (SOL) and Bitcoin Cash (BCH) were top performers in the first half of 2023. Bitcoin Cash’s rally has been catalyzed in part by a hard fork in its blockchain in May that improved the network’s security and privacy. The total market capitalization of the global cryptocurrency market peaked at over $2.9 trillion in November 2021 but took a big hit during crypto winter in 2022. That market cap now stands at just $1.1 trillion heading into the second half of 2023. Big Institutions Are Interested in Crypto, Again On June 15, asset management giant BlackRock filed an application with the SEC to launch a Bitcoin spot ETF. The iShares Bitcoin Trust will own actual BTC rather than futures contracts. The SEC has approved several futures-based crypto ETFs, but it has repeatedly rejected applications for a spot Bitcoin ETF, citing concerns over investor safety. Just days after BlackRock filed its new application, WisdomTree and Invesco both refiled applications for their own Bitcoin spot ETFs. On June 20, crypto exchange EDX Markets officially launched its platform, supporting trading of Bitcoin, Ethereum, Litecoin (LTC) and Bitcoin Cash. EDX Markets is backed by a consortium of financial giants, including Charles Schwab, Fidelity Digital Assets and Citadel Securities. EDX also announced it has closed a second funding round that includes investments by Miami International Holdings, DV Crypto, GTS, GSR Markets LTD and HRT Technology. EDX appears to be taking steps to avoid the wrath of the SEC and other crypto regulators. Unlike Coinbase, Binance and failed crypto exchange FTX, EDX plans to operate as a non-custodial exchange, meaning the exchange won’t hold customers’ crypto assets during trading. In addition, none of the four cryptos initially available to trade on EDX Markets have been classified as securities by the SEC. Konstantin Shulga, CEO and co-founder of Finery Markets, says institutional acceptance and adoption of cryptocurrency has been a long road, but Wall Street’s stamp of approval is extremely important for crypto investors. “It shows that people firmly believe that Bitcoin has the potential to become a legal and widely accepted instrument in the traditional financial industry,” Shulga says. “If the filing is approved, it will provide a convenient avenue for individuals and institutions to invest in Bitcoin without the need for maintaining crypto infrastructure for settlements and custody.” Branson Knowles, head of U.S. digital banking at Top Mobile Banks, says institutional crypto adoption could also help eliminate some of the extreme volatility associated with the cryptocurrency market. “Cryptocurrencies are gaining recognition as a legit investment option, with heavyweight institutional investors joining the fray. The more this happens, the more market stability we can expect, leading to fewer of those wild price swings,” Knowles says. SEC Crypto Crackdown Continues On June 5, the SEC filed a lawsuit against crypto exchange Binance and its founder Changpeng Zhao, charging them with 13 counts of securities laws violations. The charges include allegations Zhao and Binance marketed unregulated securities to U.S. customers and illegally mixed customer funds with company funds. In addition, the SEC lawsuit claims Binance engaged in wash trading, or selling and then rebuying the same digital assets in an attempt to drive prices higher. The SEC charges come after the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance on similar charges in March. Just one day after the SEC charged Binance, it filed another lawsuit against Coinbase, charging the company with operating as an unregistered securities exchange and selling unregistered securities as part of its staking-as-a-service program. The complaint claims at least 13 cryptocurrencies supported on the Coinbase platform are unregistered “crypto asset securities,” including Solana (SOL), Cardano (ADA) and Filecoin (FIL). In a response to the charges, Coinbase accused the SEC of failing to provide a clear set of rules for the cryptocurrency industry and said it plans to “continue to operate our business as usual.” Following the lawsuits against Binance and Coinbase, SEC Chair Gary Gensler didn’t pull any punches in discussing the behavior of the cryptocurrency industry. “I’ve been around finance for four decades,” Gensler said in an interview. “I’ve never seen so much just noncompliance and hype masquerading as reality as I’ve seen in this field.” Crypto Capital editor Eric Wade says bullish price action in the crypto market has been particularly impressive given the negative regulatory headlines. “Although we’re going through a rough patch in the crypto space, you wouldn’t know it by looking at the market itself,” Wade says. “Normally, you would expect two of the biggest [crypto exchanges] being sued by the SEC to cause more of a commotion in such a volatile market.” Other June Crypto Headlines A new study by University of Chicago finance professor Michael Weber found the percentage of Americans who own cryptocurrency has risen from 2% in 2018 to 12% as of December 2022. The study found cryptocurrency investors tend to be disproportionately young, white, male and politically libertarian or independent compared to the general population. A New York federal judge rejected an appeal by disgraced FTX founder Sam Bankman-Fried to dismiss 10 of the 13 criminal charges he faces tied to the crypto exchange’s collapse in late 2022. Bankman-Fried has pleaded not guilty to 13 charges, including wire fraud and conspiracy to commit money laundering, and he could face life in prison when his trial begins in October. Bitcoin prices have gained a lot of ground so far in 2023, but at least two crypto bulls believe the Bitcoin rally still has plenty of legs. In a recent interview with CNBC, Fundstrat head of research Tom Lee said Bitcoin prices could reach $200,000 within the next few years. Lee said interest from institutional investors and asset managers could be a bullish catalyst for cryptos. “There’s been sort of a stage exit stage left for a lot of players, but then we’ve replaced them with, you know, some of the traditional players that have a lot of credibility, like the BlackRocks and the Citadels coming into Bitcoin,” Lee said. ARK Invest CEO and CIO Cathie Wood also reiterated her $1 million price target for Bitcoin in early June. Wood became popular as a stock picker during the Covid-19 pandemic, when Arks’ flagship ARK Innovation ETF (ARKK) significantly outperformed the market. However, critics have accused Wood of poor risk management, and the ARKK fund has lagged the S&P 500 by 81% overall in the past three years.
Read more: forbes
