Regulation
Crypto Market Rises in May with Major Regulatory Approvals
Market dynamics in May
The cryptocurrency market saw a significant uptrend in May, closing the month with an 8.6% increase in total market capitalization. This increase is largely due to favorable regulatory measures, according to Binance Research. Key developments include the U.S. Securities and Exchange Commission’s (SEC) approval of eight Ethereum (ETH) spot exchange-traded funds (ETFs) and the U.S. House of Representatives’ passage of the Financial Innovation and Technology for the 21st Century Act (FIT21). The price of ETH surged 21.2% in a single day before the ETFs were approved, sparking a broader market resurgence.
Impact on Ethereum and Bitcoin ETFs
Following the approval of spot ETH ETFs, Grayscale’s Ethereum Trust (ETHE) has seen its discount to NAV continue to narrow, which now stands at 1.4%, its lowest level in almost of three years. The market will closely monitor flows of ETHE and newly approved spot ETH ETFs to gauge their impact on the market as a whole.
Bitcoin (BTC) also benefited from these regulatory developments, with spot BTC ETFs seeing 14 consecutive days of net inflows in May, contributing to the overall positive market performance.
Solana Network Developments
In another important development, Solana stakeholders adopted a proposal to distribute 100% of priority fees to network validators, moving away from the previous model where 50% of fees were burned. Additionally, daily transaction fees on Solana’s network have come closer than ever to those generated by Ethereum, while the Phantom wallet has climbed to third place in the utility category of the Apple App Store.
Growth of tokenized Treasury bonds
Tokenized US Treasuries hit a new high in May, recording an on-chain value of around $1.5 billion, representing 80% year-to-date (YTD) growth. BlackRock’s institutional USD digital liquidity fund has been a key driver of this growth and is now the largest fund in the industry.
Resurgence of prediction markets
Prediction markets have also seen a resurgence this year, with total value locked (TVL) increasing 68.6% since January. In May, net deposits exceeded $60 million for the first time, in part because of the upcoming U.S. presidential election. Platforms like Polymarket have benefited greatly from this increased activity, and further growth is expected as the elections approach.
For more details, the full report can be viewed on the Binance Search website.
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