The market capitalization of the cryptocurrency sector saw a notable increase of 8.6% in May, with the top ten coins by market capitalization ending the month on a positive note. This information is part of Binance Australia's latest monthly crypto market summary.
A major driver of this momentum was the favorable regulatory environment in the United States. This was helped by the provisional approval of eight spot Ethereum (ETH) exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) and the passage of the Financial Technology and Innovation Act. for the 21st Century (FIT21) by the United States House of Representatives.
The approval of these ETH ETFs, which came relatively soon after the initial approval of Bitcoin (BTC) ETFs in March, caused a substantial rise in ETH prices. In a single day in May, ETH prices skyrocketed 21.2%, culminating in a month-end price of $3,957.84.
Ben Rose, CEO of Binance Australia and New Zealand, highlighted the high level of activity throughout the month. "It's been another huge month for cryptocurrencies globally and here in Australia, as retail and institutional demand for digital assets continues to grow," Rose said.
Rose noted that the cryptocurrency growth narrative is spreading beyond Bitcoin. โThe cryptocurrency growth story goes beyond Bitcoin, as investors increasingly diversify their cryptocurrency investment options into other currencies,โ she added.
An analysis of the top ten coins traded by Binance Australia users highlights this diversification. Trading volumes of altcoins (any cryptocurrency other than Bitcoin) have increased in value 3.75 times in the last two quarters. This increase has seen altcoins almost double their share, going from 31% of the top ten in Q3 2023 to 61% in Q1 2024.
Regulatory progress and approval of ETH ETFs in the US have broader implications for the industry. "The positive effects that the crypto industry has experienced over the past month, largely due to high-profile regulatory progress made in the US, have spurred a further increase in interest and investment in digital assets, and retail and institutional investors increasingly see the potential of cryptocurrencies beyond Bitcoin," said Mr. Rose.
Locally, Monochrome Asset Management made headlines with the launch of its Monochrome Bitcoin ETF on the Cboe Australia exchange. This marks Australia's first spot bitcoin ETF, giving local investors greater access to digital assets. Additionally, several other Australian BTC ETFs are currently awaiting approval, which could further improve access to these types of investments.
May also marked a unique anniversary within the crypto community. May 22 marks Pizza Day, commemorating the fourteenth year since programmer Laszlo Hanyecz bought two pizzas for 10,000 bitcoins. In today's market, that transaction would be valued at around $1 billion Australian dollars.
Binance Australia's monthly crypto market summary provides a comprehensive overview of these developments and more, underlining the dynamic nature of the cryptocurrency sector both locally and globally.
