Bitcoin
and other cryptocurrencies weakened on Thursday as a battle between U.S. regulators and the two leading crypto exchanges—pressures that digital assets previously had shrugged off—began to heat up.
The price of Bitcoin has fallen less than 1% over the past 24 hours to below $26,500. The largest digital asset remains firmly above the lows near $25,500 reached in a brief selloff on Tuesday amid charges by the Securities and Exchange Commission against Binance and
Coinbase Global
(ticker: COIN). Nevertheless, Bitcoin has failed to hold Wednesday’s highs near $27,000 and has been weakening since.
“Bitcoin is trading near … a level that has acted as support over the past three months. On Wednesday, the price reversed as it approached its 50-day moving average,” said Alex Kuptsikevich, an analyst at broker FxPro. “The technical picture remains quite bearish, with Bitcoin remaining within a two-month downtrend channel, setting up an imminent drop towards $25,000 to test more significant support.”
Charging Binance and Coinbase separately this week was a dramatic advancement in the SEC’s tough-on-crypto stance. Among its charges, the agency alleged that many digital tokens are in fact unregistered securities and traded illegally on exchanges in the U.S.
While these cases could take years to play out in court, the public battle is already heating up. Coinbase CEO Brian Armstrong said the company would challenge the SEC in court for “clarity” and the definition of which cryptos are or are not securities. “We have to go to court to challenge that and we’re proud to do it for the industry,” Armstrong said in an interview with The Wall Street Journal.
Binance, meanwhile, may have SEC Chairman Gary Gensler in its sights. Binance’s law firms claimed that Gensler offered to serve as an advisor to the group in 2019, CNBC reported, citing SEC filings. A report from The Wall Street Journal in March, citing internal Binance messages, said that Binance staff approached Gensler to become an advisor. The contrast between these claims may be just a taste of contention to come.
Beyond Bitcoin,
Ether
—the second-largest crypto—dropped 1% to below $1,850. Smaller cryptos or altcoins were weaker, with
Cardano
down 3% and
Polygon
losing 2%. Memecoins were more muted, with
Dogecoin
and
Shiba Inu
trading around flat.
Write to Jack Denton at jack.denton@barrons.com
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