Week in Review: Bitcoin’s Breakout Sparks $35 Billion Crypto Rally

The rally that had eluded cryptocurrencies for the better part of two months finally materialized this week, as bitcoin and the broader altcoin universe added tens of billions in market capitalization. Bitcoin was the main catalyst for the breakout after a sudden price surge allowed it to overcome a series of technical and psychological hurdles en route to fresh five-week highs.

Cue the Crypto Breakout

The cryptocurrency market peaked just below $300 billion Wednesday following a 24-hour rally that saw more than $30 billion flow into the market.

The outburst began Tuesday after bitcoin rose 8% in the span of an hour. The largest cryptocurrency by market capitalization would eventually peak just below $7,600 as trade volumes more than doubled week-over-week. As of Friday, the bitcoin price was up more than 19% compared to seven days ago.

Altcoins also rose sharply, with Stellar Lumens adding more than 53% for the week. XLM was propelled higher by IBM’s new stablecoin project, which will launch on the Stellar network sometime in the future.

Cardano’s ADA coin was also a top performer, rising by more than a third for the week. Meanwhile, bitcoin cash and EOS saw double-digit returns.

The price rally was accompanied by an equally large surge in trade volumes. As Hacked reported earlier in the week, daily turnover on global exchanges surpassed $20 billion for the first time since May.

Coinbase and Security Tokens

Coinbase confirmed this week that the Financial Industry Regulatory Authority (FINRA) has approved a trio of fin-tech acquisitions that would eventually pave the way for security listings on the digital currency exchange. In other words, the exchange was essentially green lighted to begin offering security tokens in the future.

However, the company later clarified that it was still awaiting express permission from the Securities and Exchange Commission (SEC) before moving forward with securities listings.

While not a universal definition, “security tokens” are ICOs that the SEC believes meet the general definition of a security. Tokens that meet this definition are therefore subject to securities laws. For this reason, many ICOshave decided against listing in the United States over fear that their token will be deemed a security, thereby limiting its funding and trading options.

Approval to list security tokens gives Coinbase the opportunity to expand both the quantity and type of crypto offerings. Last week, the company announced it had short-listed five cryptocurrencies for future consideration.

Trump-Putin Meeting

U.S. President Donald Trump provoked the ire of mainstream media this week following his closed-door meeting with Russian counterpart Vladimir Putin in Helsinki.

Both leaders declared the session a success, with plans to meet again already underway. White House press secretary Sarah Sanders confirmed on Thursday that President Trump has invited Putin to Washington in the fall.

Although the meetings held minor sway in the markets, they signaled a renewed commitment to shore up geopolitical tensions between the world’s superpowers. However, it is not entirely clear what the leaders discussed in the meeting, which lasted for more than two hours. Washington’s Director of National Intelligence Dan Coats says he still does not know what Trump and Putin discussed in Helsinki.

President Trump has refused to acknowledge the intelligence community’s assertion that Russia meddled in the 2016 U.S. presidential election. Earlier this month, 12 Russian intelligence officers were indicted for hacking the campaign of Democratic officials.

The Week Ahead

For cryptocurrency traders, the past five days have marked an important paradigm shift from the months-long correction that drove bitcoin to its lowest level of the year. It remains to be seen whether the latest rally has the sustainability to bring prices back in line with the April highs or whether investors can expect more resistance ahead. Regulatory developments, including the SEC’s ruling on Coinbase security listings, could be an important price catalyst in the short term.

For Wall Street, corporate earnings are in full swing next week with several Dow industrials scheduled to report. Monetary policy developments are also on tap with the European Central Bank (ECB) set to deliver its next interest rate verdict July 26. In terms of economic data, U.S. durable goods orders and second-quarter GDP will be in the spotlight.

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.

Featured image courtesy of Shutterstock.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi