What happened
Cryptocurrencies and crypto mining companies moved higher today due to developments on the regulatory front and as mainstream financial companies continued to show support for digital assets.
Since late afternoon yesterday, the price of the world's largest cryptocurrency, Bitcoin (CRYPTO:BTC), traded roughly 4.8% higher as of 4:20 p.m. ET today.
Meanwhile, shares of the Bitcoin-mining companies CleanSpark (CLSK -1.59%) and Hive Blockchain Technologies (HIVE -0.65%) rose 12.1% and 11.2%, respectively, today.
So what
Bitcoin specifically seems to be benefiting as its market share increases. As of Tuesday, Bitcoin's market cap as a percentage of the market cap of all cryptocurrencies grew to 48.5% and briefly surpassed 50%, according to CoinMarketCap. That's the highest amount Bitcoin has consumed since May 2021.
Image source: Getty Images.
"The Bitcoin dominance grows when investors do not feel confident about the short-term market trend and adjust their position toward a less speculative portfolio, increasing their exposure to Bitcoin, which is commonly known to be the less volatile digital asset," Fineqia International analyst Matteo Greco said, according to Barron's.
On the regulatory front, lawmakers in the United Kingdom have passed a bill that would further clarify how cryptocurrencies are regulated in the country, something that many proponents believe is needed to allow the industry to move forward.
Yesterday, Parliament's upper chamber approved the Financial Services and Markets Bill (FSMB), which would regulate cryptocurrencies and stablecoins, digital assets pegged to a commodity or currency, under Britain's payments laws, paving the way for regulators to potentially implement laws they have been considering. Now, the FSMB will enter the final stages before being officially approved and put into law. More specific crypto regulation could come over the next year.
"This bill delivers the outcomes of the future regulatory framework review, giving the regulators significant new rule-making responsibilities, while balancing that additional responsibility with clear accountability, appropriate democratic input, and transparent oversight," said Baroness Joanna Penn, a member of the House of Lords.
In other news, a new exchange called EDX Markets that trades Bitcoin and several other cryptocurrencies and is backed by Charles Schwab, Fidelity, and Citadel revealed this morning that it is live and has raised new funding. This comes just after BlackRock, the world's largest asset manager, recently submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to launch a spot Bitcoin exchange-traded fund (ETF).
With some of the largest, most well-known crypto exchanges like Binance and Coinbase recently being sued by the SEC, this is welcome news for crypto investors to see mainstream financial companies further supporting the industry.
Now what
All of this is good news for Bitcoin. Its dominance in the industry shows that investors are flocking to Bitcoin as a safe haven, and more regulatory clarity and acceptance among the mainstream financial system will only legitimize the world's largest token.
Bitcoin miners like CleanSpark and Hive are of course going to do well when Bitcoin goes up because that is the token they mine and hold, but overall they tend to be more volatile.
Ultimately, I prefer to own Bitcoin itself and believe it's worth having exposure to Bitcoin, as the token continues to become more legitimized.
