Bitcoin unfazed despite regulatory pressure on largest exchange
In the form of pure volume, Binance is head and shoulders above other cryptocurrency exchanges, but when you’re on top, you also become a target. Regulatory pressure is falling heavily on Binance after last year’s FTX collapse.
Speaking of the recent FTX collapse, Binance took significant market share so it could have the opportunity to bail out FTX, according to a New York Times report. However, Binance has been put under the proverbial microscope by regulatory agencies.
“But Binance has increasingly found itself under closer scrutiny by US regulators. And now, according to a new report, they may seek to examine new evidence that the exchange’s US and global arms were more interconnected than previously described,” the report said. “With negative headlines piling up, Binance Coin, the exchange’s digital token, has fallen nearly 7 percent in the past week.”
Despite these latest developments, the same regulatory pressures that helped boost cryptocurrency markets last year during the FTX debacle have not affected the major coins for now. Bitcoin, for example, has been relatively stable – overall, the leading cryptocurrency is up over 30% for the year after falling over 60% last year.
Bitcoin outperforms major indices and gold
In fact, bitcoin’s performance outperforms that of other major indexes and assets, including the Nasdaq, the S&P 500 and the Dow Jones Industrial Average. Bitcoin is also out-performing gold as rising interest rates remain a concern, but does not appear to be halting the market rally that started late last year.
“As of March 6, Bitcoin’s year-to-date return was 32.23%, well above the performance of the major stock indices and gold,” a USA Today report noted. “The NASDAQ Composite is up 12.41%, the S&P 500 is up 5.86%, and the Dow Jones is up 0.12% this year. Meanwhile, gold had a YTD return of just 1.17%, much underperforming Bitcoin.
The ebb and flow of bitcoin’s prices have followed the aforementioned traditional assets, which began last year when downward selling pressure gripped capital markets amid rising inflation and interest rates. If the same correlation holds, Bitcoin will likely continue to follow the movement of traditional assets, meaning that monetary policy decisions will continue to be a major driver.
According to a Reuters reports, bets on more rate hikes at the Fed are increasing as the central bank acknowledges that inflation may be more stubborn than first thought. According to the report, “the likelihood that the Fed could raise rates to as high as 6% in September, which is when Fed funds futures traders see rates peaking, was above 13% on Monday, up from about 8% a week earlier , CME Group data showed.”
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