Crypto Market Surges Amid Political Shifts and Regulatory Developments

Crypto Market Surges Amid Political Shifts and Regulatory Developments

The cryptocurrency market is experiencing significant movements, influenced by political changes, regulatory advancements, and technological developments. Here’s a look at the latest trends and events impacting Bitcoin, Ethereum, and the broader crypto ecosystem.

Bitcoin Reclaims $64,000 as US Election Speculation Heats Up

Bitcoin (BTC) has surged past the $64,000 mark, reaching its highest point in October. The leading cryptocurrency peaked at $64,173, a level not seen since late September. This price movement led to over $101.4 million in crypto short position liquidations in the past 24 hours, according to data from CoinGlass.

Political Factors Drive Crypto Inflows

CoinShares’ latest Digital Asset Fund Flows Weekly Report reveals that cryptocurrency investment products saw inflows of $407 million during the week of October 5-11. James Butterfill, head of research at CoinShares, attributes this trend to the upcoming US elections rather than monetary policy outlooks.

“This trend is evident in the fact that stronger-than-expected economic data had little impact on stemming outflows,” Butterfill noted. He added that factors such as “polling toward the Republicans” led to an “immediate boost in inflows and prices,” as Republicans are widely perceived as “more supportive of digital assets.”

Harris Campaign Embraces Crypto in “Opportunity Economy” Strategy

In a surprising development, US Democratic presidential candidate Kamala Harris plans to include pro-crypto policies as part of her “Opportunity Economy” strategy. Set to be unveiled on October 14 in Erie, Pennsylvania, the strategy aims to support African American entrepreneurs and business owners.

Campaign co-chair Cedric Richmond stated that the strategy is designed to promote an economy “where Black men are equipped with the tools to thrive, to buy a home, provide for our families, start a business, and build wealth.”

This move marks a shift from Harris’s previously perceived stance on crypto. The campaign has already received support from the industry, with Ripple co-founder Chris Larsen contributing approximately $1 million worth of XRP to the Harris-Walz presidential campaign.

Ethereum’s Post-Merge Future: Vitalik Buterin’s Reflections

Ethereum co-founder Vitalik Buterin shared his thoughts on the protocol’s future in a detailed blog post on October 14. Buterin highlighted several key areas where Ethereum could see significant advancements following the successful Merge in 2022:

  1. Faster transaction speeds: Currently, transactions can take about 15 minutes, causing congestion on the network.
  2. Improved security: Enhancing the protocol’s resistance to various attack vectors.
  3. Greater accessibility for solo stakers: Proposing to lower the minimum staking amount from 32 ETH to 1 ETH.

Buterin emphasized the importance of making Ethereum more accessible to a broader range of users, potentially enabling more people to contribute to the network’s security and governance.

Market Reactions and Short Liquidations

The recent market surge has led to significant liquidations of short positions:

  • Over $100 million in crypto short positions were liquidated in the past day.
  • 54,649 traders were liquidated for over $166 million.
  • Bitcoin shorts accounted for $52.33 million of the total liquidations.
  • Ethereum (ETH) short bets saw $27.26 million in liquidations.

Ethereum also saw positive movement, reclaiming the $2,500 mark and reaching a two-week high of $2,540. Meanwhile, Bitcoin’s market dominance pushed back above 58%, approaching levels not seen since April 2021.

UAE Stablecoin Issuer Receives Regulatory Approval

The Central Bank of the United Arab Emirates (CBUAE) has granted in-principle approval to AED Stablecoin under its Payment Token Service Regulation framework. This development positions AED Stablecoin as a frontrunner to become the first issuer of a regulated dirham-pegged stablecoin in the UAE.

If fully approved, AED Stablecoin’s AE Coin could serve as a local trading pair for cryptocurrencies in exchanges and decentralized platforms, while allowing merchants to accept it for goods and services. This move eases concerns about potential restrictions on crypto payments that arose after the CBUAE’s recent release of its licensing framework.

Dubai’s Crypto Regulator Cracks Down on Unlicensed Firms

Dubai’s Virtual Assets Regulatory Authority (VARA) has initiated a crackdown on unregulated crypto companies and firms violating its marketing rules. On October 9, VARA issued fines and cease-and-desist orders to seven businesses for breaching marketing regulations and operating without required licenses.

The regulator is conducting further investigations in collaboration with other local authorities, although it did not specify which companies have received the sanctions.

FTX Aftermath: Legal Developments and Investor Actions

FTX User Sues Hedge Fund Over Bankruptcy Profits

An FTX customer, Nikolas Gierczyk, is suing hedge fund Olympus Peak, alleging the firm owes him additional recovery after he sold his claims in the collapsed trading platform. Gierczyk claims the hedge fund could gain more than $1 million from their deal and failed to honor a right to further recovery he had negotiated in their agreement.

FTX Investors End Lawsuit Against Sullivan & Cromwell

FTX investors have voluntarily dismissed their proposed class-action lawsuit against US law firm Sullivan & Cromwell (S&C). The suit, filed on February 16, alleged that S&C played a role in FTX’s multibillion-dollar fraud and benefitted from it financially. S&C served as an outside counsel to FTX in several deals and currently oversees the FTX bankruptcy proceedings.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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