The past week in the crypto market saw a rebound from last week’s jitters, with gains across various tokens and crypto-related stocks. Bitcoin crossed $70,000 for the first time in five days, while ether also saw a rise in price. However, there were some notable events that took place, including the Securities and Exchange Commission (SEC) reportedly building a case to classify ether as a security, and BlackRock launching a tokenized fund on the Ethereum network. Let’s take a closer look at what happened.
SEC Reportedly Targeting Ethereum
According to reports, the SEC is investigating the classification of ether (ETH) as a security. This investigation has gained traction following Ethereum’s transition to a proof-of-stake model in September 2022. The SEC perceives this change as resembling an investment contract, which could potentially classify ether as a security under their purview. This news may delay the hopes for SEC approval of spot ether ETFs in the near future, but some applicants have indicated their willingness to accept this designation.
Bitcoin Experiences Largest Single-Day Drop Since FTX Collapse
Last week, bitcoin experienced its largest single-day drop since the collapse of crypto exchange FTX back in 2022. This drop was more than 8%, and it was attributed to volatile price activity during U.S. opening hours. It was also noted that spot bitcoin ETF inflows were at historical highs during this time, but quickly turned into outflows. This may have been due to a bankruptcy case involving crypto lender Genesis.
BlackRock Launches Tokenized Fund on Ethereum
Global investment firm BlackRock has launched a tokenized asset fund on the Ethereum blockchain. The BlackRock USD Institutional Digital Liquidity Fund is backed by cash, U.S. Treasury bills, and repurchase agreements, and token holders will receive daily yield payouts facilitated by the Ethereum network. This development showcases the potential of tokenization, and BlackRock also has a spot ether ETF application under review at the SEC.
What To Expect in the Markets This Week
While bitcoin has recovered somewhat from last week’s lows, analysts are waiting to see if spot bitcoin ETF inflows can turn positive again. Notably, BlackRock’s iShares Bitcoin Trust is closing the gap with Grayscale Bitcoin Trust in terms of total assets under management and could soon become the largest spot bitcoin ETF. As bitcoin rises, other cryptocurrencies and crypto-related stocks also tend to see gains. However, there are concerns about declining odds of spot ether ETF approvals by the end of May and whether staking would be allowed in a potential spot ether ETF.
Overall, the market is still optimistic about the future of cryptocurrencies, but there are some uncertainties and challenges that need to be addressed. Keep an eye on the developments in the coming weeks to see how the market reacts.