As US investors pile into Bitcoin amidst the accelerating institutional activity, the leading cryptocurrency surged past $31,000 early on Friday. As of writing, BTC/USD is back to trading at around $30,850.
According to crypto analytics firm K33 Research, the price gains and trading volume of the largest cryptocurrency by market capitalization have recently concentrated during US market hours. Bitcoin has surged more than 85% so far, and lately, the US market has been the main force behind this strength seen by digital assets.
With this, Bitcoin’s market cap dominance has soared above 58%, the highest level since 2021, driven by the recent decline in altcoin prices and the growing interest from institutional investors.
Data from on-chain analytics firm Glassnode also shows that 55% of the Bitcoin circulating supply has not moved since 2021. This indicates investors prefer to accumulate and hold their BTC.
Bitcoin outperformed most of the crypto market following a slew of financial heavyweights, including BlackRock and Citadel, becoming more involved with BTC, spurring investor optimism. This can be seen in the rising open interest (OI) on the Chicago Mercantile Exchange (CME) futures market, which has been nearing its all-time high (ATH).
Amidst this, asset management giant Fidelity Investments refiled its application for a spot Bitcoin ETF. Back in 2021, Fidelity applied to launch the Wise Origin Bitcoin Trust but got rejected by the US Securities and Exchange Commission (SEC) in 2022. This time, much like BlackRock, Fidelity has included a “surveillance sharing agreement” with an unnamed US spot-based bitcoin trading platform to help ease SEC concerns about market manipulation.
Last week, digital asset funds also recorded $199 million in inflows, the largest in almost a year. Bitcoin-focused funds accounted for a vast majority (94%) of these inflows, according to a report by asset management firm CoinShares earlier this week.
In addition to improved crypto sentiments, the macro is boosting the crypto market, with economic data showing the labor market remained on a solid footing as weekly initial jobless claims saw the largest drop in 20 months.
Meanwhile, at an event held by the Spanish central bank in Madrid, Federal Reserve Chairman Jerome Powell indicated that the central bank would likely resume its rate hike path after a pause earlier this month.
According to Powell, at least two interest-rate increases are likely necessary this year to bring the inflation rate down, which “has a long way to go.” The rates are currently in the range of 5% to 5.25%, and when asked if the US would ever return to low rates from pre-pandemic, Powell said it won’t be for a “good while.”
At a European Central Bank meeting of central bankers this week, Powell said he doesn’t see inflation getting back to the Fed’s 2% until at least 2025.
SOL Token on the Rise
As Bitcoin traded high on Friday, altcoins also went green with elation, with Ether exchanging hands at $1,890. Meanwhile, Bitcoin Cash and Bitcoin SV extended their gains by 26.3% and 12.1% over the past 24 hours, respectively, and are up 196% and 74% over 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 rose by 2% to $1.236 trillion.
One of the interesting and sudden price jumps, meanwhile, was recorded by SOL, a $7.48 billion market cap token that recorded more than a 19% increase in its value since yesterday morning.
As of writing, the 10th largest cryptocurrency by market cap has been trading at $18.91 and is up 3.2% against BTC, having pared some of the gains as we progressed through the day. With these latest gains, the trading volume of SOL jumped 61.10% from a day ago to $655 million.
According to CoinGlass, open interest (OI) for Solana futures also increased by 16.4% to 13.37 million SOL ($251.14 million).
SOL had a good start to the year after it tanked under $9 at the end of 2022 following the collapse of the crypto exchange FTX whose co-founder Sam Bankman Fried (SBF) was a big proponent of SOL and its ecosystem.
Over the next two months, the price of SOL rallied past $27 in tandem with the broad crypto market, only to drop back down to almost $13.20 during the early June fall. The coin is currently up 20.7% in the past week and 25% in the last fortnight, while its year-to-date (YTD) gains now stand at 86.3%.
The coin, however, is still up a whopping 3,609% from its all-time low of $0.50 in May 2020 while having lost 92.85% of its value since its ATH of almost $260 in Nov. 2021.
SOL is the native crypto of the layer 1 blockchain Solana, offering fast transaction times and inexpensive fees.
Founded in 2017 by software engineer Anatoly Yakovenko, Solana wasn’t launched until March 2020. 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 steers the development of cryptocurrency.
The token is used to pay fees to send transactions and run 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 crypto with no hard cap, and currently, 400 million SOLs are circulating in the market. The cryptocurrency’s current annual inflation rate is 6.3% (down from the initial 8%), which decreases by 15% every year, that is, until it reaches 1.5%, which will then become the fixed rate.
Click here to learn all about investing in Solana (SOL).
Solana Blockchain Sees Growing Interest
The latest gains for SOL came despite the crypto asset facing regulatory scrutiny on whether they are unregistered securities. Earlier this month, the SEC sued Binance and Coinbase (COIN), accusing them of operating unregistered exchanges and offering the sale of unregistered securities.
In its first legal response to the regulator’s lawsuit, Coinbase claimed that digital assets listed on its platform fall outside the SEC purview. The filing said the token issuers owe no obligation to investors “because no such obligations are carried in the transactions over Coinbase’s secondary market exchange, and because the value that Coinbase purchasers receive through these transactions inheres in the things bought and traded rather than in the businesses that generated them, the transactions are not securities transactions.”
While sharing his views on the US policy approach to crypto, Ethereum co-founder Vitalik Buterin also came in support of the rival blockchain, saying the real competition isn’t other chains but rather the “rapidly expanding centralized world.”
Besides SOL, a dozen other crypto assets were listed by SEC as alleged securities, and trading platforms have been curbing offering them to avoid risk.
First, the popular trading app Robinhood announced it would end support for ADA and MATIC along with SOL on June 27. Then, UK fintech firm Revolut said in its email to US users that it is ending support for these three cryptocurrencies, effective immediately, due to changing laws and regulations in the US.
The positive price performance for SOL comes despite the latest delistings while the blockchain enjoys growth. As per crypto data provider Santiment, SOL’s popularity increased last week, and this spike in social volume then translated to positive sentiment around the token.
Solana network’s non-fungible token (NFT) space, in particular, is getting traction. According to Dune’s data, Solana NFT sales volume increased by more than 26% in the last seven days, while the number of NFT buyers and sellers went up by over 30% during the same period. Data reveals 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 be winding down operations, citing difficult macroeconomic conditions for its decision. This development came after nearly a year of the protocol raising $4.4 million to improve NFT utility.
While part of the operations such as token management, staking pool creations, NFT rentals and rental extensions, and new deposits will be halted on July 19, withdrawals will stay open until Aug. 26.
At the same time, deBridge stated that it has finally gone live on Solana after over a year-long development which will bring seamless interoperability and liquidity transfers between Solana and EVM blockchains.
While Bitcoin is currently leading the broad crypto market upswing, for SOL, popular crypto exchange OKX adding it to its “Dual Investment Structured Product” may have also contributed to the upside. This offers users 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 options contract and get paid in either cryptocurrency.
An interesting development in the Solana ecosystem came in the form of a “Liquid staking token” (LST). The trend, which is already thriving on Ethereum, has now found its place on Solana, too, where SOL token derivatives can be leveraged for high yields through a re-leveraging process.
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 saw the project’s daily active user base hit new highs right after the launch.
Under 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 swap it for mSOL again. Compared to Ethereum’s liquid staking giant Lido, which has $14.2 billion locked in ETH value, Marinade’s mSOL is tiny at just $122 million worth of SOL, as per DeFi Llama.
Click here to learn all about buying Solana (SOL) in just four steps.
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