As US investors piled into Bitcoin amid accelerating institutional activity, the leading cryptocurrency surged above $31,000 early Friday. At the time of writing, BTC/USD is trading around $30,850 again.
According to crypto analytics firm K33 Research, the price gains and trading volume of the largest cryptocurrency by market capitalization have recently been concentrated during US market hours. Bitcoin is up more than 85% so far and lately the US market has been the main force behind this power of digital assets.
With this, Bitcoin’s market cap has risen above 58%, its highest level since 2021, driven by the recent drop in altcoin prices and growing interest from institutional investors.
Data from on-chain analytics company Glassnode also shows that 55% of the Bitcoin circulating supply has not moved since 2021. This indicates that investors prefer to collect and hold their BTC.
Bitcoin outperformed most of the crypto market after a slew of financial heavyweights, including BlackRock and Citadel, became more involved in BTC, fueling investor optimism. This can be seen in the rising open interest (OI) in the Chicago Mercantile Exchange (CME) futures market, which is approaching its all-time high (ATH).
In the midst of this, asset management giant Fidelity Investments resubmitted its application for a spot Bitcoin ETF. In 2021, Fidelity applied to launch the Wise Origin Bitcoin Trust, but was rejected by the US Securities and Exchange Commission (SEC) in 2022. -based bitcoin trading platform to ease SEC concerns about market manipulation.
Last week, digital asset funds also recorded $199 million inflows, the largest in nearly a year. Bitcoin-focused funds accounted for the vast majority (94%) of these inflows, according to a report from asset manager CoinShares earlier this week.
In addition to improved crypto sentiments, the macro is driving the crypto market, with economic data showing the job market remained on a solid footing as weekly initial jobless claims saw their biggest drop in 20 months.
Meanwhile, Federal Reserve Chairman Jerome Powell signaled at a Spanish central bank event in Madrid that the central bank was likely to resume its rate hike path after a pause earlier this month.
According to Powell, at least two rate hikes are likely to be needed this year to lower inflation, which “has a long way to go.” Rates are currently in the range of 5% to 5.25%, and when asked if the US would ever return to low rates from before the pandemic, Powell said it won’t be for a “long time”.
At a meeting of European Central Bank central bankers this week, Powell said he doesn’t see inflation back to the Fed’s 2% until 2025.
SOL token on the rise
While Bitcoin was trading high on Friday, altcoins also turned green with elation, with Ether exchanging hands at $1,890. Meanwhile, Bitcoin Cash and Bitcoin SV increased their gains by 26.3% and 12.1% respectively in the past 24 hours, and rose by 196% and 74% in the past two weeks.
Compound, Litecoin, Synthetic, Stellar, Maker, Pepe, Ethereum Classic, EOS, Aave and Dash are also enjoying double-digit gains. With this, the total crypto market cap increased by 2% to $1.236 trillion.
One of the interesting and sudden price jumps, meanwhile, was recorded by SOL, a token with a market cap of $7.48 billion that has appreciated more than 19% since yesterday morning.
At the time of writing, the 10th largest cryptocurrency by market capitalization trades at $18.91 and is up 3.2% against BTC, having offset some of the gains as we progressed through the day. With these latest gains, SOL’s trading volume increased 61.10% from a day ago to $655 million.
According to CoinGlass, open interest (OI) for Solana futures also rose 16.4% to SOL 13.37 million ($251.14 million).
SOL had a good start to the year after tanking below $9 in late 2022 following the collapse of the crypto exchange FTX whose co-founder Sam Bankman Fried (SBF) was a strong supporter of SOL and its ecosystem.
Over the course of the next two months, the price of SOL surged above $27 in tandem with the broad crypto market, before falling back to nearly $13.20 during the fall of early June. The coin is currently up 20.7% over the past week and 25% over the past two weeks, while year-to-date (YTD) gains are now 86.3%.
However, the coin is still up a whopping 3,609% from its all-time low of $0.50 in May 2020, while it has lost 92.85% of its value since hitting ATH near $260 in November 2021.
SOL is the native crypto of the layer 1 blockchain Solana and offers fast transaction times and low fees.
Founded in 2017 by software engineer Anatoly Yakovenko, Solana only launched in March 2020. The Solana blockchain features Proof-of-History (PoH) that enables automatically ordered transactions, in addition to a Proof-of-Stake (PoS) consensus algorithm to help secure the network. The non-profit Solana Foundation is driving cryptocurrency development.
The token is used to pay fees to send transactions and execute smart contracts on the blockchain. Those who want to help secure the Solana network can also stake their SOL and earn rewards in exchange for locking their tokens.
SOL is an inflationary cryptocurrency with no hard cap and there are currently 400 million SOLs circulating on the market. The current annual inflation rate of the cryptocurrency is 6.3% (down from the initial 8%), which decreases by 15% each year, i.e. until it reaches 1.5%, which then becomes the fixed rate.
Click here for everything about investing in Solana (SOL).
Solana Blockchain sees growing interest
The latest gains for SOL came despite the crypto asset facing regulatory scrutiny over whether it is unregistered securities. Earlier this month, the SEC sued Binance and Coinbase (COIN), accusing them of operating unregistered exchanges and offering to sell unregistered securities.
In its first legal response to the regulator’s lawsuit, Coinbase claimed that digital assets listed on its platform are outside the SEC’s oversight. The filing said that the token issuers have no obligation to investors “because no such obligations are borne in the transactions through Coinbase’s secondary market exchange, and because the value Coinbase buyers receive through these transactions is inherent in the things being bought and traded rather than to the companies that generated them, the transactions are not securities transactions.”
While sharing his thoughts on the US policy approach to crypto, Ethereum co-founder Vitalik Buterin also supported the rival blockchain, saying that the real competition is not other chains, but rather the “rapidly growing centralized world.”
In addition to SOL, a dozen other crypto assets were listed by SEC as alleged securities, and trading venues have restricted their offering to avoid risk.
First, popular trading app Robinhood announced that it would end support for ADA and MATIC along with SOL on June 27. Subsequently, UK fintech company Revolut said in its email to US users that it is ending support for these three cryptocurrencies with immediate effect. to changing laws and regulations in the US.
The positive price performance for SOL comes despite the latest delistings as the blockchain grows. According to crypto data provider Santiment, the popularity of SOL increased last week, and this spike in social volume subsequently translated into positive sentiment around the token.
In particular, the non-fungible token (NFT) space of the Solana network is gaining traction. According to data from Dune, Solana NFT sales volume has increased by more than 26% in the past seven days, while the number of NFT buyers and sellers has increased by more than 30% over the same period. Data shows that SolPunks, MadLads, and Zero Monke Biz are among the top collections on the platform.
However, Solana’s NFT infrastructure provider Cardinal announced it would wind down its business, citing tough macroeconomic conditions for its decision. This development came after the protocol raised $4.4 million for nearly a year to improve the NFT utility.
While some of the activities such as token management, staking pool creation, NFT rentals and lease renewals, and new deposits will be halted on July 19, withdrawals will remain open until August 26.
At the same time, deBridge stated that it has finally gone live on Solana after more than a year of development, ensuring seamless interoperability and liquidity transfers between Solana and EVM blockchains.
While Bitcoin is currently leading the crypto market’s broad uptick, popular crypto exchange OKX for SOL, adding it to its “Dual Investment Structured Product,” may also have contributed to the upside. This provides users with new ways to interact with the OKX ecosystem, such as increasing profits by choosing a major crypto pair. By subscribing to this product, users can buy or sell an option contract and get paid in both cryptocurrencies.
An interesting development in the Solana ecosystem came in the form of a “Liquid staking token” (LST). The trend, already thriving on Ethereum, has now also found its place on Solana, where SOL token derivatives can be leveraged for high returns through a process of new leverage.
This week, Drift Protocol, an on-chain crypto trading project for Solana, released its new “Super staking” service, which turned the entire re-leveraging cycle into a one-click service. The new offering caused the project’s daily active user base to hit new highs right after launch.
During this process, users stake SOL tokens for mSOL, an LST issued by those using Marinade Finance, which is then used as collateral to borrow SOL tokens and then exchange them back for mSOL. Compared to Ethereum’s liquid staking giant Lido, which has $14.2 billion locked in ETH value, Marinade’s mSOL is small at just $122 million in SOL, according to DeFi Llama.
Click here to learn everything about buying Solana (SOL) in just four steps.