On the last day, Bitcoin increased 5% to reach as high as $28,474, regaining the $28,000 mark after falling below it on Monday.
As the CFTC filed a lawsuit against Binance for alleged trading rule violations, investors seemed to be getting over their concerns about a U.S. regulatory crackdown on cryptocurrency.
Traders also bet the U.S. Federal Reserve will change course and stop raising interest rates later this year.
As investors got more ready to take a chance and overcame their early concerns about American regulators’ crackdowns on industry titans, bitcoin rose strongly on Wednesday.
According to data from CoinGecko, the most prominent cryptocurrency in the world has increased 5% in the last day, reaching a high of $28,474. After news of the FTC’s action against Binance, Bitcoin has reclaimed the $28,000 mark after briefly falling below it on Monday.
The second-largest cryptocurrency, Ether, increased by about 6% to $1,816.10.
After a terrible 2022 that saw the collapse of essential cryptocurrency exchanges and a steep decline in values, Bitcoin has been steadily increasing this year. The possibility of the U.S. Federal Reserve’s interest rate hikes, which put pressure on risky assets like equities, being reversed has given investors some solace.
It was unclear why the jump occurred on Wednesday. But it does so amid a significant increase in U.S. stocks. Investors have a history of treating bitcoin more like a conventional risk asset, with its moves frequently mirroring those of the equity markets.
On Wednesday morning, the Nasdaq futures were up 100 points, or 0.9%.
Recently, US regulators have intensified their pressure on cryptocurrency companies. The CFTC has filed a lawsuit against Binance and its co-founder Changpeng Zhao for allegedly violating trading regulations by soliciting customers in the United States without a license.
For potential violations of securities laws, the Securities and Exchange Commission has also threatened to sue Coinbase.
Vijay Ayyar, head of international at cryptocurrency exchange Luno, said to CNBC via email on Wednesday: “Broadly, we are looking fairly bullish here with Bitcoin rebounding $28K and trying to target $30K next.”
“Generally speaking, when price movement begins to incorporate bad news swiftly, it suggests that the market is optimistic and on the rise. Although significant, the CFTC action against Binance doesn’t appear to have significantly impacted the market.
A previous boost for Bitcoin came from problems with the global financial system. UBS, another Swiss banking titan, recently saved Credit Suisse in a government-backed, cost-cutting arrangement.
Further failing were the crypto-focused banks Silvergate and Signature and the US tech-focused lender Silicon Valley Bank.
The Bank Term Financing Program, or BTFP, is a lending initiative launched by the Federal Reserve to lessen the impact of the banking crisis by assisting banks in meeting their responsibilities to depositors.
As a type of money that people can access without a bank account, bitcoin, according to its proponents, can act as a store of value in hard times.
It can, however, fluctuate by 10% in a couple of hours due to its extreme volatility.
In addition to the fact that the Fed has already started a kind of QE known as BTFP, the market appears to be giving more weight to macroeconomic variables, according to Ayyar, who also said that the shift in interest rates might occur sooner rather than later.
This gives the ideal environment for Bitcoin to continue remaining positive and climb higher against the backdrop of bank failures over the last few months.