Bitcoin rallies above $7,000 as Bithumb, the fifth largest crypto exchange comes back online
The reopening of Bithumb, the fifth largest crypto exchange in the world, brought in good fortune for Bitcoin as the digital currency is up by 6 percent this week. According to the data from Coindesk, the world’s largest cryptocurrency hit a high of $7,100 on Tuesday.
Seoul-based Bithumb lost an equivalent of $30 million to a hack in June, after which its banking partner Nonghyup Bank forced the exchange to temporarily stop taking new customers. This week the key exchange in South Korea, one of bitcoin’s biggest markets, reopened account registrations, according to local media outlet Yonhap News. Founder and CEO of BKCM, Brian Kelly said:
“All of this buying is coming from Asia. The biggest news in the market right now is that South Korea exchanges are coming back online.”
At a point in August, the trading volume of the exchange had dropped to around $72 million as an after-effect of the NH Bank news. According to data from CoinMarketCap.com, the exchange has recovered its 24-hour volume to $362 million by Tuesday.
Despite the introduction of some strict regulation, earlier this year, South Korea is the fourth largest market for bitcoin. In January, South Korea’s justice minister disclosed that the government was considering a shutdown of cryptocurrency exchanges in the country. The new received major pushback from retail investors and a petition to hold back on “unreasonable” regulation got 280,000 signatures.
The Bitcoin Price Hike
Another parameter that has the prices rising this summer, is the news that the digital assets are gaining institutional interest.
Following the announcement of Morgan Creek Digital and Bitwise Asset Management partnering for a Digital Asset Index Fund on Tuesday, Bitcoin jumped above $7,000, after trading in the $6,000 range for the majority of August. The new fund aims at investors like endowments, pension funds, and family offices and has a minimum $50,000 investment and gives investors exposure to a basket of cryptocurrencies.
Investors are keeping a keen eye on the market for the of any institutional money, especially in the form of exchange-traded funds. In July, the rumors that the ETF proposed by VanEck might be approved by the Securities and Exchange Commission by August pushed Bitcoin to rally 20 percent, above $8,000. Though it soon nosedived as SEC postponed the decision until September.
Meanwhile, observing SEC’s apprehensions, the chances of any meaningful ETF approved any time soon seems unlikely. Just last week the agency slapped down 9 more bitcoin ETF proposals including two ETFs filed by ProShares that would track bitcoin futures contracts, another from GraniteShares, and five leveraged and inverse ETFs from Direxion. The reason cited for the rejection is much the same as Winklevoss Twins’ ETF rejections, as SEC is concerned about fraud and manipulation in bitcoin markets.
Though crypto enthusiasts do feel dejected by the ETF rejections, the prices soon stabilized instilling a renewed positivity in investors. Bitcoin’s recent jump can be attributed to the same. Notably, cryptocurrency is still down about 50 percent since the beginning of 2018, and 64 percent from its high in December.
This may be the reason why the senior market analyst of eToro, Mati Greenspan, warns that this not the signal investors have been waiting for and bitcoin will not go “from here to the moon by next month.” He adds:
“Big money tends to be cautious, especially while we lack clarity. While the bear is gone, the bulls remain hesitant to reveal themselves.”
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