Key takeaways:
- Bitcoin has surpassed $42,000 and sparked broader bullish activity across cryptocurrency markets
- The sudden increase in the value of digital assets might have been flared by US Treasury Secretary’s statement on the upcoming Biden’s executive order on crypto
- Terra was one of the biggest benefactors of today’s rally; the ecosystem’s leading LUNA gained over 20% and came within striking distance of its ATH
Crypto markets swing into the green zone as the U.S. Treasury releases a statement on digital assets
The bulls had the upper hand today, as the total cryptocurrency market cap increased by close to 6% and reached $1.89 trillion in the early hours of Wednesday. Bitcoin broke $42,000 on the heels of more than 8% 24-hour gains, while Ethereum and other major altcoins followed in the footsteps of the world’s oldest and largest crypto and generally posted high single-digit gains. In total, 93 out of the top 100 digital currencies traded in the green zone at press time.
On Tuesday, US Treasury Secretary Janet Yellen published a statement on the Biden administration’s upcoming executive order on the cryptocurrency industry. The statement was published a day early and promptly removed from the site but not fast enough for it not to be captured on a web archive.
It is hard to conclude how big of an impact the statement had on today’s market rally. However, it seems that President Biden’s upcoming executive order is unlikely to pursue drastic changes in crypto legislation if yesterday’s statement is anything to go by. An excerpt from Yellen’s statement reads:
“Treasury will partner with interagency colleagues to produce a report on the future of money and payment systems. We’ll also convene the Financial Stability Oversight Council to evaluate the potential financial stability risks of digital assets and assess whether appropriate safeguards are in place.”
Terra’s LUNA gains 20% and eyes the $100 price tag
When talking about today’s rally, it is impossible not to highlight LUNA’s impressive market performance. Over the course of the last 30 days, LUNA’s price increased by more than 75%, which ranks it among the best performing digital assets in the time period. Thanks to today’s double-digit gains, LUNA reached a cycle high of $98.5 which is less than 5% removed from its all-time high of $102.8 reached at the tail end of 2021.
LUNA’s price increase reflects the Terra ecosystem’s rapid growth, both in terms of its native stablecoins like TerraUSD and TerraKRW and the broader DeFi use cases. According to blockchain analytics firm DeFi Llama, more than $25 billion worth of digital assets is locked in decentralized protocols running on the Terra blockchain, good for a 74% month-over-month increase. For context, Ethereum tops the rankings with a TVL of $114 billion, while the third-placed BNB Chain sports a TVL of roughly $12 billion.
It will be interesting to observe whether LUNA will be able to build on the momentum generated in the past two weeks and whether it manages to reenter the $100 territory in the coming days.
