Daily News | US Stocks Rise as Financial Shift Sparks Hope, Bitcoin Rebounds Amidst Legal Battles and Optimism Upgrade

2023-06-07, 01:43

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## Crypto Daily Digest: Bitcoin Leads Crypto Rebound as Optimism Completes Bedrock Upgrade and Coinbase Faces SEC Lawsuit

Cryptocurrency prices experienced a notable rebound on Tuesday, with <a href="/vi/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> (BTC) taking the lead after a sell-off triggered by the US Securities and Exchange Commission's (SEC) lawsuit against Binance. BTC surged by 5.1%, surpassing the $27,000 mark. While a second lawsuit was filed against rival exchange Coinbase, the broader crypto market also showed signs of recovery, although to a lesser extent. Ether (ETH) rose by 4.1%, and other tokens such as ADA, SOL, <a href="/vi/price/bnb-bnb" target="_blank" class="blog_inner_link">BNB</a>, and MATIC displayed varied movements. Interestingly, the SEC's filings did not mention BTC and ETH, indicating that these leading cryptocurrencies are considered commodities. Market analysts suggest that the crackdown on altcoins could ultimately benefit bitcoin, as investors may redirect their focus and investments towards the more established token.

In another significant development, <a href="/vi/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a>, a layer 2 scaling solution for <a href="/vi/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a>, successfully completed its Bedrock upgrade, bringing the blockchain one step closer to its aspiration of becoming a "Superchain" composed of multiple interoperable mini-blockchains. The upgrade, implemented as a hard fork, aimed to enhance the overall functionality of the chain. Notable improvements include a reduction in deposit-confirmation times from 10 minutes to just 1 minute and a 40% decrease in gas fees. The software upgrade took place on Tuesday, with external infrastructure elements gradually coming back online. The Optimism Foundation announced that the public endpoint would go live soon.

Following the completion of the Bedrock upgrade, the native token of Optimism, $OP, experienced a notable surge of 10% in value over the past 24 hours.

However, amidst the positive developments, Coinbase, one of the leading cryptocurrency exchanges, finds itself embroiled in a legal battle with the SEC. The regulatory agency has filed a lawsuit against Coinbase, accusing the exchange of failing to register as a broker, exchange, or clearing firm. Additionally, the SEC alleges that Coinbase's staking program violates securities laws. This lawsuit follows a similar action against Binance, marking an escalation in the SEC's efforts to regulate the crypto industry. The situation is particularly challenging for Coinbase as the company heavily relies on the US market, making it vulnerable to the potential ramifications of the lawsuit.

Brian Armstrong, CEO of Coinbase, took to Twitter to express his stance, defending the company and stating that he is proud to represent the industry in court. Armstrong reiterated that the SEC had previously reviewed Coinbase's business and approved its transition to a public company. However, legal experts argue that going public does not imply approval of a company's business or its legality. Going public simply means that the SEC has reviewed the offering prospectus and ensured compliance with filing requirements.

The outcome of the legal battle between Coinbase and the SEC remains uncertain, with potential wide-ranging implications for both the exchange and the broader crypto industry. Should the SEC.

## Bitcoin (BTC) $27,276 (+0.18%) - Neutral Outlook

![](https://gimg2.gateimg.com/image/article/1686102049Untitled0607 1.png)

![](https://gimg2.gateimg.com/image/article/1686102060Untitled0607 2.png)

The sudden recovery of BTC was evident in the form of an engulfing candle, a pattern that typically suggests a continuation of an upward trend. However, as mentioned in yesterday's analysis, the weekly timeframe suggests that the BUEC (Back Up Against Creek) phase may not be complete until BTC reaches the weekly level of 24270. Despite this, the recent progress in BTC's price may have instilled some confidence in traders. Therefore, it is crucial to closely monitor the trading volume to determine if the bullish trend will persist.

## Macro: Financial Shift Sparks Hope for a Broader Market Rally as US Stocks Rise

Asian equity futures signaled a positive trend in the region on Wednesday, driven by multiple factors including signs of stimulus in China, positive geopolitical developments, and strength in US shares. The previous day, US stocks had recorded gains, propelled by a shift towards financial shares, which sparked hopes of a broader market rally extending beyond the technology sector.

The S&P 500 inched up, despite Apple's stock decline, which tempered the overall tech rally. However, regional banks saw notable gains, with the KBW Regional Bank index surging 5.4% and the Russell 2000 rising 2.7%. The outperformance of small-cap stocks against the tech-heavy Nasdaq 100 also attracted attention, marking a significant occurrence not seen since November 2020.

Investors also took note of the US-listed Chinese companies' rally of 3.8%, supported by two key developments. Firstly, US Secretary of State Antony Blinken's plan to visit China in the coming weeks, signifying a potential thaw in US-China relations. Secondly, Chinese authorities reportedly asked major banks to lower deposit rates for the second time in less than a year, indicating efforts to stimulate the economy.

Looking ahead to Wednesday, futures for Japanese and Australian shares indicated slight gains, while Hong Kong futures surged 1.9%. Traders closely monitored any potential government interventions to support China's tepid economic recovery and struggling stocks. Bloomberg Economics even anticipated that the People's Bank of China might lower its one-year benchmark interest rate as early as mid-June.

While US markets showed resilience, with the S&P 500 on the cusp of a bull market, caution permeated global markets. Some analysts questioned whether stock prices had risen too quickly, driven by excessive enthusiasm surrounding the prospects of artificial intelligence.

The global economy faced uncertainties due to concerns over interest rate hikes impacting economic activity and vulnerabilities in lower-income countries, as highlighted in a World Bank report. However, traders increasingly expected the Federal Reserve to maintain interest rates during its June meeting, given the persistently high US inflation. Richard H. Clarida, former vice-chair of the Federal Reserve, also suggested that rate cuts were unlikely until 2024.

Notably, the performance of equities appeared less likely to be affected by Treasury needs following the debt ceiling suspension, according to experts. This alleviated concerns that increased issuance would divert cash away from risk assets.

In currency markets, major currencies traded within narrow ranges at the start of Wednesday's session. Meanwhile, government bond yields in Australia and New Zealand experienced fractional increases.

Commodities exhibited mixed movements, with gold maintaining stability, while oil retreated slightly from its gains on Tuesday, following news of Saudi Arabia's supply cut. Wheat prices surged after Ukraine reported that Russian forces had blown up a giant dam in the country's south.

<div class="blog-details-info">
<div>Author:** Peter L. **, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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