Bitcoin’s (BTC) price closed last week at $26,300, a 1.6% increase from the $25,900 price at the end of last week. The BTC price bounced during the weekend, following the announcement of a principle of agreement between Binance, the biggest digital asset exchange by volume, and the SEC, concerning the US Binance entity. In addition, one of the biggest worldwide asset managers, Blackrock, filed for the approval for a BTC spot ETF.
After the strong downtrend of the first week of June a rebound was expected, especially following the good news on the macroeconomic side.
The US Federal Reserve announced for the first time in more than one year a pause of rate hikes and inflation in the US decreased for the 11th month in a row. This would suggest a positive response from investors as they are good data for risk-on assets, but prices did not strongly rebound.
Bitcoin’s dominance has grown
The market trend can be confirmed observing the Bitcoin dominance, the metric which measures the proportion between the total digital asset market cap and the Bitcoin capitalisation. Despite the overall good performance of the digital asset market in 2023, the Bitcoin dominance grew year-to-date from 42% to the current 49.7%.
“The Bitcoin dominance grows when investors do not feel confident about the short-term market trend and adjust their position towards a less speculative portfolio, increasing their exposure to BTC, which is commonly known to be the less volatile digital asset,” said Matteo Greco, a research analyst with Fineqia International.
SEC causing uncertainty in digital assets space
The SEC actions caused uncertainty in the market. The regulator claimed that many digital assets should be classified as securities. Fearing further legal actions, the trading platforms Robinhood and eToroUS decided to halt in the US, starting from the next few weeks, the trading of the digital assets that the SEC flagged as securities in its filing.
“At this stage, it is crucial to pay attention to the next SEC actions,” Greco at Fineqia said. “It is difficult to predict what is going to happen, but surely the fight between service providers and the regulator is hurting the US digital asset market, with investors and entities that are leaving the country or reducing the size of operations, waiting for more clarity.”
Greco said this can be appreciated analysing the Euro market share on centralised exchanges, in proportion to US Dollar transactions. Euro market share is now 18%, up from just 9% at the start of the year relative to the US Dollar.