 "Cryptocurrency")
In the past week, the cryptocurrency market recovered after witnessing a sell-off on Wednesday after the resignation of the chief executive officer of the largest exchange, Binance. In the last seven days, Bitcoin was up 3.71 per cent and was trading at $37,800 on Friday, according to CoinMarketCap. Ethereum was up 6.8 per cent and was trading at $2,103.51.
On Tuesday, the US Department of Justice (DOJ) and Binance agreed to delist trading pairs and prepare for a complete withdrawal from the United States market on charges of money laundering. Binance will also pay a penalty of $4.3 billion. Changpeng Zhao (CZ), CEO of Binance, has stepped down from his management role as part of his guilty plea on charges of operating without a license and conspiracy. He will, however, retain his ownership in the exchange.
After the announcement, markets saw a sell-off but recovered quickly.
Talking about the development, Rajagopal Menon, vice president at WazirX said, "While tokens underwent minor price changes, it was perhaps one of the rare instances where market fear, uncertainty and doubt did not impact prices significantly. In fact, the signs of an early 2024 bull run are keeping investors on their toes with unfettered enthusiasm."
The investors were fearful of an FTX-style collapse after the news but Binance processed huge withdrawals, calming them.
"The exchange successfully processed nearly $1 billion in withdrawals in the 24 hours after the judgment, quelling fears of an FTX-style bank run; and continues to operate for its global user base without a glitch. Experts at JP Morgan think that this development could be a long-term positive for the sector, as the constant overhang of 'shutdown fears' has now been surpassed," said Parth Chaturvedi, investments lead at CoinSwitch Ventures.
The market also showed optimism as many believe the settlement of the Binance case has now cleared the decks for the US Securities and Exchange Commission (SEC) to finally approve a spot bitcoin ETF. According to Bloomberg, the industry is looking at a potential $100 billion market if the proposed ETFs are approved by the SEC.
More From This Section
"The growing optimism around Bitcoin and Ethereum ETFs is creating a lot of excitement among the trading community. The market indicators are signalling towards a very promising 2024 for the digital asset market," said Shivam Thakral, CEO, BuyUcoin.
"Market participants are eagerly anticipating the 2024 Bitcoin halving and the potential approval of a Bitcoin spot ETF in the US. Bitcoin's price is now up almost 126% since the beginning of the year," added Edul Patel, CEO, Mudrex.
However, the concerns around inflation and further rate hikes by the US Federal Reserve continue to remain.
"It is also important to note that the Fed hasn't completely dismissed the potential for a future rate hike if economic conditions necessitate. The pace of economic growth appears to have slowed, potentially influencing upcoming policy decisions," Menon said.
