Bitcoin To Secure Second Quarterly Gain As Smaller Tokens Struggle

Bitcoin (BTC) continues to establish its dominance in the digital asset market as it records new gains in the wake of the Securities and Exchange Commission’s (SEC) crackdown on altcoins. 

The largest asset by market capitalization has surged 86.31% year-to-date (YTD) to recover from a turbulent 2022 which saw over 55% wiped off its market cap. 

Bitcoin’s quarter-quarter growth is set to continue into Q2 2023 with the top asset recording a growth of 8.49% in the last three months. These gains have come on the backs of renewed institutional thirst for BTC. 

Q2 was not all rosy for BTC as it touched lows in May following a bearish market outlook. Since then, the asset has tapped new highs not recorded in years including trading above $31,000 for the first time in 12 months. 

Bitcoin also regained its 50% market dominance for the first time in nearly two years as the total market cap topped $1.2 trillion. 

However, at press time, BTC has lost that lead and trades at $30,810 with a market dominance of 48.395% according to data from CoinGecko.

In contrast, altcoins were weakened amid overstretched regulatory woes meted out by a  Gary Gensler-led SEC.

This month, the SEC filed fresh lawsuits against Binance and Coinbase alleging several misconducts including offering trading services to unregulated securities, commingling user assets in the case of Binance, and lack of proper regulation. 

The regulator’s bite on altcoins led to a sharp decline in the prices of major assets including Ether, Solana (SOL), BNB, and Polygon (MATIC). 

On the other hand, BTC has been exempted from the securities crackdown after regulators have expressed that the asset is more like a commodity. 

Caroline Mauron, the co-founder of derivatives liquidity provider, Orbit Markets opined that BTC would likely strengthen amid regulatory uncertainty. 

“There was a flurry of derivatives activity on the tokens singled out by the SEC lawsuits, with some traders looking to take advantage and pick the bottom, while others attempted to hedge their exposure by buying puts,” she added. 

MicroStrategy’s Michael Saylor also noted that a crackdown on altcoins could play in Bitcoin’s favor, in the long run, predicting a more dominant market share. 

Institutional investors hand BTC the torch

Bitcoin’s uphill run was sparked by top institutional investors as they renewed their push for the first Bitcoin spot ETF and other products. 

Asset management giant, BlackRock made the first move which led to a price surge with many describing the bid as the “real deal” following the firm’s success rate with the SEC.

The Commission has turned down all previous bids for a spot BTC ETF citing fears of market manipulation leading to crypto enthusiasts terming Gensler an “enemy” of the market. 

BlackRock’s proposal led to other firms making a similar application even though many have been previously denied. Notable among the applicants are WisdomTree, Invesco Galaxy, Ark Invest, and Valkyrie Investment. 

Another boost in the market was the launch of EDX, a digital asset exchange backed by top Wall Street firms including Fidelity Investment, Citadel Securities, Charles Schwab, etc.