The price of bitcoin surges to a six-month high as regulatory tension eases

As concerns over the possibility of a regulatory crackdown in the United States eased slightly over the past week, bitcoin surged over 9% on Wednesday to trade at its highest level since August.

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BTCUSD, +0.82% the largest cryptocurrency, traded at $24,364 on Wednesday, according to CoinDesk. Even so, it was still down 65% from its November 2021 all-time high near $70,000.

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There has been an increase in oversight of the crypto industry by U.S. regulators since several major companies collapsed last year as a result of regulatory concerns.

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As stablecoin issuer Circle denied rumors that the company had received a Wells notice from the Securities and Exchange Commission regarding its dollar-pegged stablecoins, the crypto rally on Wednesday may have been influenced by a sense of relief. This, according to Edward Moya, an analyst at Oanda, is one of the main reasons for the crypto rally on Wednesday.

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“Traders are still confident that regulation will not destroy stablecoins, which could mean the worst part of the crypto winter is over,” Moya wrote in an email to Trade Algo

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Paxos, another stablecoin issuer, stated on Monday that it had received a Wells notice from the Securities and Exchange Commission (SEC) on Tuesday. There was a notice from the SEC about the possibility of recommending an enforcement action alleging that Paxos had failed to register BUSD, a stablecoin issued by Paxos and branded as a security by the world's largest crypto exchange, Binance, as a security.

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Wednesday's session ended choppy with gains for U.S. stocks. As a result, the Dow Jones Industrial Average DJIA, +0.11% gained 39 points, or 0.1%, while the Nasdaq Composite COMP, +0.92% advanced 0.9%, and the S&P 500 SPX, +0.28% gained 0.3%.

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