The crypto market recorded a sudden gain on Tuesday after a sustained bearish outlook in the past two weeks. Bitcoin price gained over 5 percent to temporarily reach $28k, but had since stabilized around $27.4k during the early Asian market on Wednesday. Ethereum (ETH) price also led the altcoin market in gains with a spike of about 4.3 percent in the past 24 hours to trade around $1,719.
Bitcoin Cash (BCH) and Toncoin (TON) were among the top altcoin gainers with a spike of about 15 percent and 12 percent respectively. As a result, the majority of short traders were rekt with over $171 million liquidated in the last 24 hours.
Top Reasons for the Sudden Crypto Market Spike
The cryptocurrency market received good news after the United States Court of Appeals for the D.C. Circuit paved the way for Bitcoin exchange-traded funds (ETFs). Notably, the court argued that the SEC failed to provide enough evidence to support its denial of Grayscale’s application to convert its GBTC to a spot Bitcoin ETF. While the SEC can provide other reasons for its denial to approve Bitcoin ETF, the hopes were substantially increased.
“The Commission failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale’s proposed bitcoin ETP,” the court said, referring to exchange-traded products. “In the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful.”
Another reason that contributed to Bitcoin price gain is the continued decline in BTC supply on crypto exchanges, meaning long-term holders are buying more coins irrespective of the price volatility.
Meanwhile, the cryptocurrency market faces more regulatory uncertainty after the SEC filed a sealed motion against Binance, which includes more than 35 exhibits.