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After a Rebound Bitcoin Peters Out Near $30,000

By Sunil Jagtiani and Sidhartha Shukla

Bitcoin’s 2023 rebound has resumed after stalling around the closely watched $30,000 level, despite the latest US crypto crackdown and a more sober assessment of the outlook for Federal Reserve monetary policy.

The Bitcoin logo on souvenirs during the listing ceremony for the CSOP Bitcoin Futures and CSOP Ether Futures exchange-traded funds (ETFs) at the Hong Kong Stock Exchange in Hong Kong, China, on Friday, Dec. 16, 2022. A pair of Hong Kong ETFs investing in Bitcoin and Ether futures raised $79 million as the city pushes ahead with a plan to become a crypto hub even as the sector globally reels from the FTX collapse. Photographer: Paul Yeung/Bloomberg

The largest digital currency rose as much as 3.5% to $30,478 as of 8:40 a.m. Tuesday in New York, after sinking 3% a day earlier in its worst drop since March 9. Ether and an index of the top 100 digital assets also posted gains.

Global equities were mostly higher as signs of a Chinese economic bounceback helped markets look past patchy US company earnings and the possibility of more central bank policy tightening. 

The Securities and Exchange Commission on Monday added to its digital-asset clampdown, saying that crypto platform Bittrex Inc. broke the agency’s rules for years. The growing regulatory heat and cooling expectations for eventual Fed interest-rate cuts damped investor enthusiasm.  

Recent economic data have helped to firm bets on a quarter-point Fed rate hike in May while tempering projections for subsequent policy easing.

Bitcoin may pull back toward $27,000 if “the market continues to take out some of the 60 basis points or so of rate cuts still priced into year-end,” said Tony Sycamore, a market analyst at IG Australia Pty.

The digital currency has jumped 80% this year, outstripping an 8% climb in global stocks, as crypto markets partially rebounded from 2022’s crash. 

But the long shadow of digital-asset bankruptcies and scandals, most notably the collapse of FTX, continues to hang over the sector.

SEC Suit

In its lawsuit against Bittrex, the SEC highlighted six tokens as examples of cryptoasset securities that were available for trading on company’s platform: OMG Network (OMG), Dash (DASH), Algorand (ALGO), Monolith (TKN), Naga (NGC) and IHT Real Estate Protocol (IHT).

Algorand, which has the largest market value of the group at about $1.6 billion, shed as much as 2% on Tuesday before stabilizing. Naga was the biggest decliner, losing about 23% over the past 24 hours, according to CoinGecko data.

The SEC views most digital tokens as securities and argues crypto exchanges should register with the agency since they are involved in securities trading.

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