Bitcoin and other cryptocurrencies experienced a significant surge in value on Friday following a favorable outcome in a high-profile legal case involving Ripple and the Securities and Exchange Commission (SEC).
Within the last 24 hours, the price of Bitcoin has increased by 2% to reach $31,200, breaking free from its stagnant trading range of $30,000 to $31,000 that had persisted for several weeks. This surge has propelled Bitcoin to its highest level in over a year, surpassing $31,750.
The catalyst for this upward movement was a federal court ruling on Thursday, which clarified that a specific crypto token did not meet the definition of a security by itself. While Bitcoin is widely regarded as a commodity rather than a security, this ruling holds significant implications for smaller tokens and the broader digital asset industry. Ultimately, the success of these smaller tokens can also have positive effects on the overall performance of the largest cryptocurrencies.
Antoni Trenchev, managing partner at crypto lender Nexo, believes that Bitcoin will benefit from this ruling: “Bitcoin itself will rise on the coattails of this ruling—a rising tide lifts all boats—and (briefly) broke through the upper end of its recent trading range, where it’s been residing for three weeks. Keep an eye on $32,000 because if Bitcoin breaks through that, the upper $30,000s beckon.”
This recent rally builds upon the gains Bitcoin has already experienced earlier in the week. As cryptocurrencies rose alongside the Dow Jones Industrial Average and S&P 500 in the stock market, signs of cooling inflation emerged. This trend may lead the Federal Reserve to adopt a less aggressive approach to interest rates, which were a hindrance to cryptocurrencies last year. It is anticipated that the Federal Reserve will begin cutting rates next year, providing support to risk-sensitive assets such as stocks and cryptocurrencies.
In addition to Bitcoin, Ether, the second-largest cryptocurrency, climbed by 6% to nearly $2,000. Ripple, the token central to the court ruling, witnessed a staggering 70% spike in value. Other smaller tokens or “altcoins” followed suit with significant gains. Notably, memecoins, including Dogecoin and Shiba Inu, also exhibited strength, with gains of 7% and 5% respectively.