The cryptocurrency market added almost $100 billion to its market cap on Wednesday after Bitcoin jumped above $42,000 for the first time since 4 March. In a major recovery, altcoins also saw substantial gains.
The price jump in cryptocurrency Terra (LUNA) was the most notable one after the digital asset reached $99, which is its highest level since December 2021. With a daily spike of approximately 20%, LUNA remained the best-performing cryptocurrency among the top 10.
After last week’s price dump, short crypto traders increased their positions. However, the latest spike has resulted in the liquidation of more than $150 million worth of short positions. BTC alone accounted for the liquidation of over $75 million worth of short crypto positions.
“Bitcoin rallied 9% to over $42,000 this morning, as key points from Joe Biden’s executive order on crypto have been leaked. The order seems relatively benign, hence giving the market some clarity. This is the 'first-ever, whole-of-government' approach to overseeing the sector in the US as it calls on the Treasury, Financial Stability Oversight Council, Federal Reserve and national security agencies to work on relevant sections of the crypto ecosystem,” Marcus Sotiriou, an Analyst at GlobalBlock, said.
Crypto Optimism?
Bitcoin and other digital currencies saw enormous volatility during the recent geopolitical issues. While the crypto market was already suffering from a major correction, some of the digital assets performed better than traditional financial assets. According to Sotiriou, the recent developments indicate that crypto optimism has returned.
“Institutions are finding other ways to gain exposure to crypto ETFs, as VanEck launched a crypto mining ETF today, which gives exposure to companies in the crypto asset mining industry. According to VanEck, it’s a 'compelling time' to launch the fund due to being in the early stages of growth,” Sotiriou added in the latest note.
