Key Points:
- Bitcoin’s price fluctuations and market trends.
- Ethereum’s growing importance in the crypto space.
- The impact of regulatory changes on cryptocurrencies.
The broader cryptocurrency markets exhibited modest declines later in the day on Wednesday.
Bitcoin, which had approached six-month lows earlier in the session, experienced a sudden 2% surge on Friday afternoon, pushing its price above $25,900. This rally was triggered by the FASB’s approval of a favorable accounting treatment for companies holding cryptocurrencies on their balance sheets and ARK Invest’s submission of paperwork for a spot ether ETF.
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However, this initial enthusiasm faded swiftly, with Bitcoin surrendering its gains from the session and settling just below $25,700, roughly in line with its price 24 hours earlier. Ether mirrored this price movement and remained steady at $1,630.
The broader CoinDesk Market Index (CMI) underperformed slightly, declining by 0.3% over the past day.
Economic News Paints a Bearish Picture
Crypto faced downward pressure on Friday morning when the ISM Services Index for August exceeded expectations, registering at 54.5, up from the previous 52.7 and surpassing economist predictions of 52.5. This news further affirmed the ongoing expansion of the U.S. economy, diminishing the need for the Federal Reserve to consider easing monetary policy. It resulted in higher interest rates and pushed the price of Bitcoin below $25,400.
Accounting Rules Provide an Optimistic Boost
Later on Friday, the Financial Accounting Standards Board (FASB) effectively approved a rule mandating that both public and private companies with cryptocurrency holdings on their balance sheets use fair-value accounting when reporting these assets. Currently, companies must mark their crypto holdings at the lowest value they reached during a quarter, a practice that some, including MicroStrategy’s Michale Saylor, view as an obstacle to corporate adoption.
Continued ETF Excitement
While the focus on exchange-traded funds (ETFs) has primarily revolved around the flurry of applications for a spot bitcoin fund, Ether took the spotlight with Cathie Wood’s ARK Invest and 21Shares collaborating to file paperwork for the first spot ether ETF in the United States. In response to the FASB news and this development, both Bitcoin and Ether experienced significant upward moves, although they subsequently retraced a portion of those gains, leaving both cryptocurrencies relatively unchanged for the day at the time of this report.
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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
