Cryptocurrency prices rallied over the weekend. Bitcoin jumped to within striking distance of its record high, while ethereum powered to its highest level since late 2021. Institutional demand remains high as the Trump administration continues on its mission to integrate cryptocurrencies into mainstream finance.
Bitcoin overnight Sunday surged above $122,300, nearly reaching its record high around $123,100 from late July. The price of the world's largest cryptocurrency eased back below $119,900 late Monday. Bitcoin is now up 27% so far this year.
Ethereum peaked near $4,350 overnight Sunday, marking its highest price since December 2021. Ethereum is now up 26% this year and closing in on its record of $4,891 from November 2021.
Institutional demand was strong this week after President Donald Trump on Thursday signed an executive order that will allow 401(k) retirement plans to invest in cryptocurrencies and other alternative assets.
Digital asset funds saw nearly $1 billion in outflows early last week on weak U.S. payroll data, according to a report from CoinShares. But inflows quickly rebounded to $1.57 billion following the 401(k) crypto approval, which brought the net weekly inflows to $572 million.
Ethereum exchange traded products led with $268 million in inflows, which brought the year-to-date total to a record $8.2 billion.
Bitcoin products saw $265 million in inflows — ending a two-week streak of outflows and bringing its total this year to over $20.5 billion.
U.S. firms led the buyers, with $608 million in inflows, followed by Canada at $16.5 million.
Project Crypto
Meanwhile, the Securities and Exchange Commission continues to shape its digital asset regulations after announcing its "Project Crypto" initiative at the end of July.
SEC Chairman Paul Atkins in the announcement speech said that Project Crypto will help "achieve President Trump's vision of making America the crypto capital of the world," and build on the GENIUS Act as well as other digital asset objectives from the administration.
Atkins broke from prior SEC policy and said that "most crypto assets are not securities." He directed staff to develop clear guidelines for market participants about which cryptos fall under their purview. Under the Clarity Act, which is a market structure bill waiting for a Senate vote, the Commodity Futures Trading Commission will have primary jurisdiction over digital assets.
He is also exploring purpose-fit disclosures, exemptions and safe harbors for various crypto asset transactions that are subject to securities law to allow "Americans to enjoy legal certainty and an accommodating regulatory environment."
Atkins noted that he instructed staff to work with various businesses that want to tokenize their stock, bonds and other securities on blockchains.
Another key objective for the SEC is allowing participants to innovate with "super-apps," which allow securities intermediaries to offer a range of products and services with a single license.
The SEC is already allowing more freedom for firms. The agency last week ruled that certain liquid staking activities do not involve securities, and do not fall under their jurisdiction.
Staking is a consensus mechanism used in proof-of-stake blockchain networks, like ethereum, to validate transactions. Selected users can stake their tokens on a network as collateral, then earn rewards or interest on those tokens as they validate transactions and help secure the network.
Crypto Stock Action
Coinbase stock popped 3% Monday as cryptocurrency prices rallied. Shares of the exchange have advanced more than 28% so far this year.
The iShares Bitcoin Trust ETF and other spot bitcoin ETFs swung 2.3% higher, pushing out of buy zones for flat bases.
Strategy climbed 1.3% Monday, to rebound above its 50-day line and add to its 38% gain this year.
TeraWulf led bitcoin miners Monday as shares jumped more than 7%. Hut 8 jumped nearly 6%.
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