Crypto Ecosystem

Why did Bitcoin jump to $35,000?

, October 26, 2023

Why did Bitcoin jump to $35,000?

In this week’s crypto highlights, we explore the price movements of BTC, XRP, MINA, and SOL. Additionally, this recap includes other notable industry news items that occurred over the last seven days. Without further ado, let’s dive into the latest market developments.

Noteworthy market events

BlackRock registered a ticker for its spot Bitcoin ETF, lined up a seed funding plan

BlackRock recently updated its spot Bitcoin ETF filing, sparking market interest with two notable amendments:

  • BlackRock obtained a CUSIP number and a ticker for its iShares Bitcoin Trust (IBTC). Furthermore, the trust is now listed on the Depository Trust and Clearing Corporation (DTCC), which is responsible for clearing Nasdaq trades.
  • BlackRock plans to “seed” its ETF starting this month. This means providing initial funding for the trust.

Eric Balchunas, Bloomberg’s senior ETF analyst, explained that these steps are part of the process of bringing an ETF to market. Some crypto enthusiasts interpreted this news as a sign BlackRock’s product might soon be approved.

However, an ETF appearing on the DTCC website doesn’t indicate its regulatory approval. In addition, Balchunas clarified that “seeding is typically not a lot of money, just enough to get an ETF going. So I wouldn’t read this as ‘omg Blackrock is buying a ton of Bitcoin.’”

Notably, BlackRock’s ETF has been available on the DTCC website since August. On October 24, it was temporarily removed, and Bitcoin experienced a slight price decrease. However, it was returned, available again on the DTCC website, at the time of this writing.

Grayscale victory over the SEC in spot Bitcoin ETF case made final

Another possible catalyst for BTC’s big week is a mandate issued by the U.S. Court of Appeals for the District of Columbia Circuit, which closed a dispute between the U.S. Securities and Exchange Commission (SEC) and Grayscale. Essentially, a final ruling orders the agency to scrap its prior denial of the asset manager’s spot Bitcoin ETF application, and conduct a fresh review. Now, the SEC could choose to approve Grayscale’s application, or perhaps reject it on other grounds.

The SEC chose not to appeal the ruling, making this court’s action a formality. This helped build up a new wave of ETF excitement before the BlackRock news dropped. 

Uniswap founder burned “$650 billion” in crypto

It’s not a typo. $650 billion in crypto was actually wiped out over last weekend. Well, technically.

The story begins in 2018 when Hayden Adams, the founder of Uniswap, created a token called HayCoin (HAY). The token was launched for testing Uniswap at its initial development stages, and was never intended to hold any value. But recently, HAY was added to Uniswap v3. Some crypto enthusiasts discovered the token, as well as its history, and started buying it as a joke and a digital relic. 

Notably, there were only a few tokens available on the market (arguably used for testing), causing the HAY price to rapidly teleport to $3 million. The rest of the token supply, or 99.99% to be precise, remained in Adams’ wallet. So the Uniswap founder technically owned around $650 billion in HAY tokens.

Adams was surprised that HAY was treated like a memecoin, and decided to burn the remaining token supply stored in his wallet to avoid speculation and involvement in HayCoin’s potential future. At the time of this writing, HayCoin continues trading near $3 million per token.

Lightning Labs rolled out Taproot Assets on mainnet

Lightning Labs released its Taproot Assets protocol on the mainnet, enabling the issuance of stablecoins and other assets on the Bitcoin network. This mainnet release of the protocol supports on-chain functionality, with Lightning support coming soon.

The firm claims that the ability to add stablecoins to their applications was one of the major requests they received from developers. According to the team, the protocol only requires an issuer to make a single Bitcoin transaction, to mint an effectively unbounded amount of Taproot Assets. All of the metadata describing those assets is stored off-chain.

One sentence news

  • BlockFi announced on its website that its bankruptcy plan was effective, and the company has emerged from it.
  • The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) published a notice, proposing to label crypto mixers a “primary money laundering concern.”
  • Solana’s largest DeFi protocol, Marinade Finance, started blocking U.K. users due to “compliance concerns” over Financial Conduct Authority (FCA) regulations.
  • Chinese oil and gas company PetroChina completed the first international crude oil trade using the country’s central bank digital currency (CBDC), e-CNY.
  • Coinbase-supported layer 2 (L2) network Base decided to open source its smart contract and frontend repositories on Github, to increase transparency and accountability. 
  • SuperDao, the platform dedicated to aiding communities in establishing their decentralized autonomous organizations (DAO), revealed its decision to cease operations, and is in the process of refunding remaining funds to investors.

Notable price performances

Bitcoin price set a new 2023 high amid ETF excitement

BlackRock’s amendments to its spot Bitcoin ETF, and Grayscale’s final victory in the case against the SEC, are considered two of the major catalysts behind Bitcoin’s rally to $35,000. However, these are not the only drivers of the recent wave of ETF excitement. JPMorgan analysts said that the SEC will likely approve multiple spot bitcoin ETFs “within months.” There is also an opinion that BlackRock’s application may not be among the first to be approved.

Following this rally, Bitcoin’s open interest at the Chicago Mercantile Exchange (CME) reached a new high, surpassing 100,000 BTC. This may act as a way for institutional investors to hedge their positions, especially if they accumulate spot Bitcoin. The key takeaway here is that ETF excitement seems to be taking place among both retail and institutional participants.

With the latest price action, Bitcoin outperformed a significant portion of the crypto market, showing a more than 20% weekly price increase. Bitcoin dominance also reached its highest level in two and a half years. It seems that “Uptober” may confirm its name, as Bitcoin is currently showing one of its best-performing months this year. 

However, there is still potential for a downward movement. The BTC price broke a 17-month-long resistance high, and moved to the overbought zone with RSI. This indicates that consolidation or correction is possible in the short term. The closest potential target for bears could be around $31,600, and/or $30,000.

XRP price jumped amid another Ripple “victory” against the SEC

According to a court filing, the SEC dismissed all claims against Ripple CEO Bradley Garlinghouse and co-founder Christian Larsen. Previously, the regulator alleged the two executives aided and abetted Ripple Labs’ unregistered securities offerings through XRP sales. Notably, the filing said the SEC will continue pursuing its claims against Ripple in a central case. Ripple’s Chief Legal Officer called this move “a surrender by the SEC.” 

Following this news, the XRP price broke the 200-day SMA and approached the resistance line (cyan line). The daily AO made a zero cross, hinting at a potential continuation of upward movement. But the RSI reached the overbought zone on lower timeframes, indicating that a price consolidation, or correction may occur. The following price movement could depend on whether or not XRP sustains above the $0.53 support area.

Nonetheless, the upcoming stage in the legal battle between the SEC and Ripple will revolve around establishing suitable sanctions for Ripple regarding its improper institutional sales. Both the SEC and Ripple are required to present a proposed briefing schedule on potential remedies to the court by November 9.

MINA price surged after listing on the South Korean exchange

On October 24, South Korean crypto exchange Upbit announced the MINA listing. After this news, the token surged by almost 100%, while achieving a daily trading volume of $1.3 billion. According to Matrixport, MINA even outperformed Bitcoin in terms of trading volume denominated in South Korean won.

Shortly before this jump, the MINA price broke a seven-month descending resistance (blue line). After reaching the $0.91 level, the asset slid to the 0.5 Fibonacci point, and is currently experiencing a price consolidation. The daily RSI is in the overbought zone, but moved out of it on lower timeframes. This hints that price consolidation has the potential to be maintained in the short term.

If bulls manage to defend the 0.5 Fibonacci point, the asset could try to retest the $0.77 and $0.82 levels. If failed, the 0.618 Fibonacci point, which is located near $0.56, could act as the next potential target for bears.

SOL price erased FTX losses

Solana is currently showing one of the best monthly performances among top digital assets by market cap, enjoying over 65% price increase. As a result, the asset managed to set a new 2023 high and moved above $32, the point where the asset sat shortly before the FTX collapse in November 2022. Solana’s total value locked (TVL) also reached a new yearly high, but is still 97% down from its all-time high of $10 billion.

Some of the major catalysts behind this price rally are considered to be news about the FTX redemption plan, increased network activity, and asset support from institutional market participants. A few weeks ago, CoinShares reported that Solana is a favorite among institutional investors, due to its partnerships with financial organizations such as Visa, as well as its ability to provide cost-effective transactions.

However, after the recent rally, the asset started showing signs of a bearish divergence on lower timeframes. This suggests that bullish momentum may be fading, and the price may retest the $0.27 support area.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

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Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

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