Cryptocurrency Prices Have Recovered $26 Billion from Last Week’s Bear-Market Low
Cryptocurrency prices were seeing green on Tuesday, as investors continued to rally behind news of a popular bitcoin trading app being granted regulatory approval to operate in New York. The push for regulated crypto custodial services has also not gone unnoticed, with the likes of Coinbase looking to overcome one of the final barriers to institutional adoption.
Crypto Prices Hit One-Week High
Digital currencies on Tuesday overcame tepid trading conditions and lower trade volumes to reach their highest level in seven days. The total market peaked at $294.2 billion at 17:00 UTC but has since consolidated at $290.5 billion, according to CoinMarketCap. As a reminder, the market bottomed near $264 billion last week, the lowest since early April.
Crypto prices have been surprisingly stable since last week’s brisk selloff. As Hacked reported earlier, bitcoin volatility is at its lowest level in a year even while factoring the latest price collapse.
Almost all of the top-ten coins had reported gains over the past 24 hours. Tron’s 8.3% gain was the biggest, with TRX trading at $0.048.
Ethereum rose 3.4% over the past 24 hours to trade at $536.86. Bitcoin cash reported slight gains, climbing 1.6% to $900.54.
Bitcoin was virtually unchanged compared with the same time Monday. The world’s largest cryptocurrency by market cap is up 2.5% over the past seven days.
Although trading volumes were a paltry $13.2 billion, turnover is up 39% from Sunday’s lows.
Prices received their initial boost Monday afternoon on news that Square, Inc.’s Cash app was granted a BitLicense to operate in New York. The app, which has a bitcoin trading platform, has more than seven million active users. The company, which is led by Twitter’s Jack Dorsey, saw its share price and market cap rise significantly on the news.
Custodianship: The Final Frontier?
San Francisco-based Coinbase has joined forces with hedge funds and third-party custodians to unlock up to $10 billion in institutional capital. According to some industry insiders, custodianship is the last of the major barriers to widespread cryptocurrency adoption among hedge funds, banks and day traders.
As Goldman Sachs, Nomura Holdings and others have demonstrated, there is strong appetite for cryptocurrencies at the institutional level. But without a stable and robust custodian service, staking large positions on a highly volatile market is not considered feasible. This is especially the case for funds that are involved with handling university endowments and pension programs.
According to Ari Paul, co-founder of the Blocktower crypto-focused hedge fund, institutional money has been trickling into the digital currency market since mid-2017. And while adoption has been slower than expected, “that doesn’t mean it’s not coming,” Paul tweeted May 31. “There are a lot of pieces that need to come together, one big piece being third party custody,” he said.
Kyle Samani, a cryptocurrency hedge fund manager, recently told Bloomberg that custodianship is viewed as “the final barrier” to market entry. “Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital,” he said.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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