Bitcoin recently made a comeback as the clouds of SEC's regulatory actions began to disperse. This turn of events has sparked a debate among investors: Is it the right moment to invest in Bitcoin?
Ark Investment Doubles Down on Coinbase Amidst Regulatory Scrutiny
Noted high-growth investor Cathie Wood is upping her fund’s stake in Coinbase Global COIN after the crypto exchange found itself in the crosshairs of the Securities and Exchange Commission this week. This move showcases investor confidence in crypto assets despite the regulatory challenges.
Cathie Wood’s ARK investment management procured 419,324 shares of Coinbase, valued around $21.6 million, bolstering its stake across ARK's Innovation ETF ARKK, the Next Generation Internet ETF ARKW, and the Fintech Innovation ETF ARKF. This acquisition bolstered Ark’s total Coinbase holdings to 11.44 million shares, valued at nearly $590 million.
Allegations of Deception and Violations: Binance Under Scrutiny
Notably, the SEC's lawsuit accuses Binance and its CEO, Changpeng Zhao, of engaging in deceptive practices and violating U.S. laws. The allegations include secret control of Binance.US, artificial inflation of trading volumes, diversion of customer funds, and misleading investors, per a Reuters article, quoted on Yahoo Finance (read: Crypto ETF Market in Turmoil as Binance Faces SEC Lawsuit).
Then the SEC filed a lawsuit against Coinbase this week, accusing the company of operating as an unregistered exchange and broker, and classifying 13 assets on its platform as crypto asset securities. His send the stock crashing.
Crypto Markets Show Resilience Despite Legal Hurdles
Despite legal headwinds faced by prominent crypto platforms such as Binance and Coinbase, investors have dismissed these concerns. The crypto market capitalization has climbed to an impressive $1.17 trillion.
Bullish Momentum Amid Liquidation of Short Positions
In the recent market rebound, several traders in the Bitcoin market were compelled to offload their Bitcoins at a higher price due to forced closures of their short positions by Binance. This forced liquidation acted as a stimulus for further upward movement in Bitcoin prices by generating additional demand.
Technical Indicators and Moving Averages Show a Bullish Trend
Although Bitcoin currently hovered around the $26,900 mark this week, experiencing resistance near $27,350, other technical indicators and moving averages are bullish, suggesting that buying pressure might still prevail. Overcoming the critical resistance level at $27,350 will be key to maintaining Bitcoin's upward trajectory. At the time of writing, bitcoin stayed at 26,329.63.
ETFs in Focus
Against this backdrop, we highlight below a few blockchain and digital-asset based ETFs that may be tapped on the recent dip.
Global X Blockchain ETF BKCH
Valkyrie Bitcoin Miners ETF WGMI
VanEck Digital Transformation ETF DAPP
Bitwise Crypto Industry Innovators ETF (BITQ)
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