Bitcoin rose on Wednesday morning in Asia to trade above US$29,700. Ether also logged gains along with all other top 10 non-stablecoin cryptocurrencies. Solana led the winners with an almost 5% jump. The crypto rally followed PayPal’s launch of a U.S. dollar-pegged stablecoin on Monday. That coincided with a sharp drop in global government bond yields Tuesday after the release of China’s weaker-than-expected economic data. Meanwhile, the Forkast 500 NFT index edged higher on increased trading volumes, while U.S. stock futures traded lower as ratings agency Moody’s downgraded several mid-size U.S. banks.
Cryptos rally
Bitcoin rose 2.02% in the last 24 hours to US$29,764.75 as of 07:50 a.m. in Hong Kong and moved up 0.41% for the week, according to CoinMarketCap data. The world’s leading cryptocurrency briefly breached the US$30,000 resistance level on early Wednesday morning.
Ether gained 1.61% to US$1,855.88 but was still down 0.82% over the past seven days. All other top 10 non-stablecoin cryptocurrencies traded higher, with Solana’s SOL leading the winners. The token rose 4.93% to US$24.19 and logged a weekly gain of 1.07%.
The crypto market received a boost from global payment giant PayPal’s stablecoin launch on Monday. Known as PayPal USD (PYUSD), the stablecoin will allow users in the U.S. to make transfers to compatible external wallets, pay other customers and purchase foreign currencies using the token.
“PayPal’s stablecoin launch is an important development for crypto within the U.S. Although the initial launch is limited, with PayPal’s size and global reach, it is likely to impact global stablecoin usage and adoption going forward,” said William Cai, co-founder and managing partner at U.S.-based asset management firm Wilshire Phoenix.
“It is another clear signal of institutional confidence that crypto isn’t going away and will emerge from this ‘crypto winter’ stronger,” added Cai. “Stablecoin is the grease of the crypto markets. Overall increase in stablecoin market cap will coincide with a major upward trend in crypto prices.”
Greta Yuan, head of research at Hong Kong-headquartered digital asset exchange VDX, said that while it is not the first time major institutions have entered the stablecoin space, previous attempts met with substantial regulatory obstacles.
“The recent progress of a bill aimed at establishing a federal regulatory framework for stablecoins, coupled with PayPal’s deep expertise in the payment industry, has the potential to set up PayPal for a more promising growth path,” Yuan added
Meanwhile, Ark Invest Chief Executive Officer Cathie Wood said in a Tuesday interview with Bloomberg that she expected the U.S. Securities and Exchange Commission (SEC) to approve multiple spot-Bitcoin exchange-traded funds (ETF) at the same time.
There is now a growing sense of optimism that successful ETF applications from major U.S. asset managers including BlackRock, Fidelity Investments and Wisdom Tree could be the start of large-scale institutional investment in the digital asset space.
Later on Tuesday, Mike Novogratz, CEO of investment management firm Galaxy Capital, reportedly said via conference call that the SEC’s approval of a Bitcoin ETF was likely a matter of “when, not if.” Issuers of Bitcoin ETF would, he said, “fight like cats and dogs to win market share” once they received approvals.
“This could have caused the 3-4% rally in Bitcoin prices overnight,” said Markus Thielen, Head of Research & Strategy at digital asset service platform Matrixport.
“A common pattern is emerging where Bitcoin prices tend to rally during US trading hours but retrace during Asian trading hours,” Thielen added. “Nevertheless, Bitcoin is still in a trading range but a potential SEC approval could push prices higher.”
The total crypto market capitalization gained 1.71% in the past 24 hours to US$1.18 trillion, while trading volume moved up 9.37% to US$36 billion.
