Cryptocurrency update: BTC spirals, XRP soars & SEC ETF review begins
Two major cryptos are gaining traction this week, with Bitcoin and XRP rallying. Elsewhere, the SEC is reviewing a new crypto ETF application that could bring more to the masses.
Musk tweet sends BTC spiralling
Elon Musk is up to his old Bitcoin tricks.
The enigmatic billionaire, and noted crypto champion, tweeted “…going to moon very soon” on Saturday 10th April, and lo and behold! BTC smashed through the $60,000 level once again.
Bitcoin prices hit $61,222 on Luxembourg-based exchange Bitsmap following Musk’s tweet, reaching above $60,000 for the first time since mid-March 2021.
Are all-time highs on the way again? We could be looking at even higher prices this week. At the time of writing, Bitcoin futures had exceeded Saturday’s price, and were trading at around $61,500.
Bitcoin prices have doubled in 2021 so far after starting the year around $30,000.
Elon Musk has been at the centre of the BTC boom with his itchy tweeting finger and appetite for cryptos. Earlier this year, Tesla made headlines for snapping up $1.5bn worth of BTC. Since then, it has made more profit on BTC price increases than by selling cars.
The effect of influential institutional idols like Musk is clear on Bitcoin markets, but it’s also the power of memes. The internet’s chief cultural currency has been a strong market force in 2021 (see /r/Wallstreetbets and GameStop’s tango) and using language like “to the moon” puts Musk firmly in meme territory.
“To the moon” is something of a rallying cry for a new breed of traders, particularly susceptive to big e-celeb names’ perceived wisdom.
It’s not clear if the latest price rally is all down to Musk, or if other factors are at play, but his influence on BTC prices cannot be underestimated.
XRP soars after beating legal challenges
XRP, the token for blockchain platform Ripple, soared 38% at the tail end of last week, after some key legal wins.
The currency has grown 110% in value across the last week as a federal judge ruled that Ripple’s CEO Brad Garlinghouse and former CEO Chris Larsen do not have to provide their personal financial records to the Securities and Exchange Commission (SEC).
The SEC alleges Ripple raised capital via unregistered securities in 2013, to the tune of $1.3bn, but Ripple maintains its token is not a security. Bitcoin and Ethereum, for instance, are not considered securities by the SEC.
Presiding United States District Court Judge Sarah Netburn also ruled upon a motion of discovery which grants Ripple access to SEC memos and minutes “expressing the agency’s interpretation or views.” These records are expected to reveal why the SECr has not classed Bitcoin or Ethereum as securities.
If the requested documents state the SEC has referred to XRP as a “virtual currency”, instead of a security, it’s expected Ripple will be able to strengthen its case. That’s because the lawsuit, brought against Ripple in December 2020, revolves around the SEC’s determination that XRP is deemed a security.
As the case rolls on it looks like a settlement between the two parties is the most likely outcome.
As such, investor confidence in XRP and Ripple is going from strength to strength. That is feeding into higher XRP prices that we’re seeing today. In the seven days up to April 11th, XRP had made 118% gains – the highest weekly increases seen for three years.
SEC WisdomTree Bitcoin ETF review begins
Last week, the SEC kicked off its initial review process for WisdomTree’s latest Bitcoin ETF application.
The body will be reviewing the WisdomTree Bitcoin Trust, which the ETF giant filed with Cboe BZX Exchange. WisdomTree made its filing last month, following on from a previous attempt to set up a BTC-focused ETF in June 2020.
As you’ll no doubt have seen over the past couple of years, the cryptocurrency sector is still young, brimming with froth and volatility.
An ETF, like WisdomTree is proposing, could provide a safer option for retail investors to gain exposure to the sector without having to directly invest in potentially volatile Bitcoin via a regulated financial product.
WisdomTree’s BTC ETF is the second currently under review by the SEC. The other, by Van Eck, has closed its first comment period, generating only five comments from the securities regulator, which appears promising.
While several attempts have been made to get a crypto ETF to market, so far, the SEC has yet to approve any such fund. Over a dozen have been rejected over the last couple of years. However, commentators believe that a BTC ETF will be approved in 2021.
That would be a first for the US. Even so, several crypto ETFs have been launched globally on exchanges in Canada and Brazil.