Bitcoin Blows Past $72K, Ether Up On Dencun Upgrade Optimism

What Happened in Crypto Markets Last Week?

Bitcoin (BTC) soared past yet another price milestone, crossing $72,000 this morning on the back of the price momentum from last week where it made two all-time highs. Meanwhile, ether climbed steadily past $4,000 amid optimism around lower fees after the highly-anticipated Dencun upgrade for the Etherum network—which will help improve transaction processing speeds at scale—this Wednesday.

Meanwhile, two SEC commissioners explained their displeasure with how the crypto industry has been regulated in the U.S, and Federal Reserve Chairman Jerome Powell made it clear that there are no immediate plans to launch a central bank digital currency (CBDC) for the U.S. dollar.

Bitcoin Hits a New All-Time High on Back of ETFs

The launch of spot bitcoin ETFs in the U.S., as well as the upcoming halving event, have been credited for bitcoin’s recent rally to multiple all-time highs. Though after each of the highs, the largest cryptocurrency by market cap fell significantly before clawing back some of those gains.

On Monday, bitcoin marched past $72,000 possibly amid optimism around the UK regulator’s softening stance to allow cryptocurrency exchange-traded notes (ETNs) in the country.

“The Financial Conduct Authority will not object to requests from Recognised Investment Exchanges (RIEs) to create a UK listed market segment for cryptoasset-backed Exchange Traded Notes (cETNs). These products would be available for professional investors, such as investment firms and credit institutions authorised or regulated to operate in financial markets only,” the London Stock Exchnage said in a statement.

Blackrock’s Bitcoin ETF, MircoStrategy are Big Bitcoin Buyers

Over the past couple of months, Blackrock’s iShares Bitcoin Trust (IBIT) has become a major hub of bitcoin trading activity, as its bitcoin stash temporarily grew larger than MicroStrategy’s (MSTR) last week. However, MicroStrategy announced the acquisition of another 12,000 bitcoins on Monday, taking their current balance to 205,000.

Additionally, the nine new ETFs have grown to a combined size larger than Grayscale Bitcoin Trust (GBTC), according to BitMEX Research. GBTC has experienced more than $10 billion in outflows since its conversion to an ETF. Notably, Grayscale’s offering has much higher fees of 1.5% than the other nine spot bitcoin ETFs currently on the market.

Bitcoin Price Powering Gains For Some Crypto-Related Stocks

MicroStrategy’s bet on buying bitcoin is paying off in a spectacular fashion. Shares of MicroStrategy were up 16% at around $1,650 in early afternoon trading Monday. The stock is up more than 600% over the past year, and has risen about 140% since the start of 2024.

According to MircoStrategy executive chairman Michael Saylor, shares of the company are a good option for investors seeking bitcoin exposure.

“If you’re bitcoin-curious right now and you want to buy bitcoin at the all-time high, how do you get the upside in bitcoin with downside protection? MicroStrategy sold $800 million in debt and we have $12-$13 billion of bitcoin on the balance sheet,” Saylor told CNBC in an interview Monday. “If you’re a bitcoin maximalist and you love bitcoin and you want it to hold forever, the ETFs charge you 25 basis points, MicroStrategy is accreting—we’re giving you a yield against your shares in a tax-efficient fashion.”

Coinbase (COIN) is another stock benefitting for the bitcoin rally. Despite glitches due to massive trading volumes in the past couple of weeks, the cryptocurrency exchange stock has risen more than 15% in the past five days and gained about 70% year-to-date.

SEC Commissioners Criticize Agency’s Crypto Stance

The Securities and Exchange Commission‘s (SEC) action against former digital assets trading platform Shapeshift came under fire from the regulator’s own commissioners.

While ShapeShift agreed to pay $275,000 for allegedly facilitating trades of unspecified digital assets deemed securities, SEC commissioners Hester Peirce and Mark Uyeda questioned the lack of clarity around which tokens were considered securities. They argued the ambiguity makes it challenging for crypto firms to discern regulatory compliance, potentially stifling innovation.

“Cases like this do not protect investors; they intimidate innovators and entrepreneurs,” stated Peirce and Uyeda. “We respectfully dissent.”

The commissioners’ statement echoes frustrations from companies such as Coinbase and Kraken, which have also been sued by the SEC for operating unregistered securities exchanges.

Fed Chair Powell Says No Reason to Worry About CBDC

During Congressional testimony last week, Federal Reserve Chairman Jerome Powell addressed concerns surrounding the potential development of a U.S. CBDC.

“We’re nowhere near recommending or adopting a central bank digital currency in any form,” said Powell.

Powell aimed to quell speculation that a CBDC could enable the Fed to directly compete with private banks or monitor personal financial transactions, emphasizing that any digital currency endeavors would operate through the existing banking system. His remarks come amid legislative efforts to prevent the Fed from issuing a CBDC without congressional approval, reflecting ongoing debates around privacy and the implications of central bank-backed digital currencies on the financial landscape.

What to Expect from Ether Network Upgrade

Ether (ETH) has now hit $4,000 for the first time since December 2021, as the network is scheduled to experience an upgrade, known as Deneb-Cancun or Dencun, this week. Ether is up more than 4% on Monday and has gained over 70% year-to-date.

According to Fidelity Digital Assets, the upgrade is expected to drastically lower fees on various layer-two network protocols that have been built on top of the base Ethereum blockchain.