Cryptocurrency News

After a strong first half of 2023, Bitcoin (BTC) and other major cryptocurrencies kicked off the second half of the year with lackluster performance, despite a positive court ruling in July concerning the ongoing trial between XRP maker Ripple and the U.S. Securities and Exchange Commission (SEC).

July Crypto Market Performance

Bitcoin prices briefly jumped to new 52-week highs above $31,000 in July following more reports that inflation is easing, but the world’s most valuable crypto ran out of steam in the second half of the month.

Bitcoin prices dropped more than 3% overall in July, finishing the month below $29,300. Ethereum (ETH) prices rose less than 1% in July to close out the month at $1,859.

Among the 10 largest cryptocurrencies by market capitalization, Solana (SOL) was the best July performer with a 56% gain. Bitcoin was the worst performer of the month but remains one of the best-performing major cryptos of 2023.

Bitcoin has gained 75% so far in 2023, putting it on track for its best annual performance since 2020. Ethereum prices are also up 55% so far in 2023.

The total market capitalization of the global cryptocurrency market peaked at over $2.9 trillion in November 2021, but it took a big hit during crypto winter in 2022. The industry’s market cap now stands at just $1.1 trillion heading into August.

Morpher CEO Martin Froehler says the 2023 Bitcoin rally could resume in the months ahead.

“We are almost done with the interest rate hike cycle, so the current macroeconomic headwinds will soon begin to fade. Simultaneously, we are about 9 months away from the next Bitcoin halving event, which historically has always propelled the price up dramatically,” Froehler says.

Kyle DaCruz, director of digital assets product at VanEck, says Bitcoin’s limited supply and scarcity create long-term value for investors.

“Central banks around the world have ushered in unprecedented growth in money supply, effectively eroding their currencies’ purchasing value. In comparison, Bitcoin’s limited supply and increased mining difficulty over time may support the idea of Bitcoin as a long-term store of value and as an alternative to gold,” DaCruz says.

XRP Court Ruling

Crypto investors got some good news on July 13 when a judge awarded Ripple a partial victory in its legal battle against the SEC. The SEC had sued Ripple back in 2020, alleging the company breached securities laws by selling its cryptocurrency XRP without properly registering it as a security.

In the new ruling, a judge in the Southern District of New York ruled XRP is “not necessarily a security on its face.” The ruling sent the price of XRP and other altcoins soaring, but the decision wasn’t a definitive victory for Ripple.

The judge ruled XRP was not a security when it came to sales made through trading algorithms, exchanges or other distribution methods, such as employee compensation. However, the judge found Ripple’s institutional sales of XRP were securities transactions.

Following the court ruling, popular cryptocurrency exchanges Coinbase (COIN) and Kraken reinstated XRP trading on their platforms.

Coinbase’s stock price also jumped following the Ripple ruling. Investors saw the court’s decision in the Ripple case as a positive for Coinbase in its own legal battle with the SEC over allegations Coinbase has been operating as an unregistered exchange and broker.

Controversial Worldcoin Launch

Cryptocurrency Worldcoin successfully launched in July, and the new crypto is making big waves in the industry. Worldcoin was founded by Sam Altman, the CEO of ChatGPT maker OpenAI.

The Worldcoin project is focused on assigning users World ID “digital passports” by using iris-scanning biometric imaging devices. The goal of the project is to solve the increasingly difficult problem of determining whether a person posting or interacting on the internet is a real human or artificial intelligence software.

Worldcoin’s critics have raised concerns about major security and privacy risks associated with collecting biometric data.

Worldcoin’s cryptocurrency began trading under the ticker WLD on July 24, and users who participated in eye scans received free tokens as a reward. WLD tokens are currently unavailable for U.S. investors, but New York, San Francisco and Miami are among the 30 global cities where people can get their Worldcoin eye scans.

In its first week of trading, WLD tokens traded in a range of between $1.66 and $3.58, according to CoinMarketCap. The crypto has a market capitalization of roughly $267 million.

Current Cryptocurrency Legislation

Congress took steps forward with several pieces of major cryptocurrency regulation legislation in July as investors seek further clarification on industry oversight.

For starters, the House Financial Services Committee advanced a bill that would establish rules surrounding payment stablecoin issuance.

The HFSC also advanced a comprehensive bill establishing a framework for cryptocurrency regulation, including a clear set of rules to determine whether a digital asset should be classified as a security or a commodity.

In addition to the crypto-specific bills, the Senate approved a massive defense spending bill that included measures to help the Treasury Department crack down on the use of cryptocurrency to finance illicit activities.

Elon Musk and Dogecoin

Popular meme cryptocurrency Dogecoin was a top performer in July. The crypto jumped 8% on July 24 after Tesla (TSLA) and X CEO Elon Musk changed his bio on the popular social media app to include the Dogecoin symbol.

Musk has rebranded Twitter as X in recent weeks, and some crypto enthusiasts have speculated he will eventually integrate Dogecoin as a payment method for the platform.

Musk previously added Dogecoin as a payment method for certain Tesla products, and he is a major Dogecoin investor himself.

Other July Crypto Headlines

On July 26, TD Cowen initiated coverage of crypto stock MicroStrategy (MSTR) with an “outperform” rating. TD Cowen analyst Lance Vitanza says the company’s strategy of investing all its retained earnings in Bitcoin will likely pay off in the long term.

“This is not a short-term trading strategy but rather reflects a belief that ultimately, Bitcoin will prove a superior store of value relative to metals and fiat currencies,” Vitanza says.

“We see MSTR as an attractive vehicle for investors looking to gain Bitcoin exposure.”

Cryptocurrency exchange Binance laid off more than 1,000 employees in July and cut certain benefits for its remaining workforce as the company continues to deal with U.S. market share losses and expensive lawsuits by the Commodity Futures Trading Commission and the SEC.

Both regulators allege Binance operated illegally in the U.S. Data provider Kaiko estimates Binance’s American crypto exchange, Binance.US, has seen its market share drop from 27% in April 2023 to barely above 1% today.

An investor group led by private investment firm Tally Capital and venture capital firm Capital6 is reportedly in the final stages of a $125 million acquisition of cryptocurrency-focused media company CoinDesk. CoinDesk reportedly generated $50 million in revenue in 2023 from online advertising, events and other sources.

Alex Mashinsky, founder of failed crypto lender Celsius Network, was arrested on July 13 and charged with seven crimes, including securities fraud, market manipulation and commodities fraud. Celsius was one of the earliest victims of 2022’s crypto winter, which culminated with the collapse of popular crypto exchange FTX in November of last year.

Also, in the ongoing Bitcoin ETF front, a new report by crypto trading firm NYDIG suggests a Bitcoin spot exchange-traded fund could generate $30 billion in new Bitcoin demand.

The SEC has repeatedly rejected applications to create a Bitcoin spot ETF to trade on a major U.S. exchange out of concerns for investor safety, but crypto traders are optimistic a new batch of Bitcoin applications from BlockRock, Fidelity and other major financial institutions could finally change the SEC’s mind.