With the approval of US regulators, banks began to custody cryptocurrencies, and the price of Bitcoin rose by 5% instantly. This news caused a stir around the world. The cryptocurrency market has once again become the focus of heated discussion, and investors have paid attention to this good news, hoping to profit from it. Let's take a deep look at this eye-catching event and see its impact on the cryptocurrency market and the financial sector.

With the major decision of US regulators to approve banks to custody cryptocurrencies, the price of Bitcoin soared instantly, with an increase of up to 5%. This news made investors' eyes light up and they were bullish on the price trend of Bitcoin. The decision of banks to custody cryptocurrencies has undoubtedly injected a shot of adrenaline into the cryptocurrency market and built a bridge for the integration of traditional financial institutions and the digital currency world. How this move will affect the future trend of the cryptocurrency market and the direction of change in the financial industry is worth our in-depth thinking.

As the cryptocurrency market becomes increasingly mature and standardized, the intervention of regulators is particularly important. The decision of banks to custody cryptocurrencies marks the regulatory authorities' recognition and support for this emerging field. The intervention of regulators will effectively regulate market order, reduce investment risks, and create a safer and more transparent trading environment for investors. This move will also lay a solid foundation for the healthy development of the cryptocurrency market and inject new vitality into the long-term development of the industry.

Globally, the development of the cryptocurrency market has attracted much attention. The decision of US regulators to approve banks to custody cryptocurrencies will have a profound impact on the global digital asset market. This decision will not only promote the standardization and legalization of the cryptocurrency market, but also bring new changes and opportunities to the global financial system. Investors' quick response to this good news also reflects the market's optimism about the future development of cryptocurrencies.

In general, the news that US regulators approved banks to custody cryptocurrencies and the price of Bitcoin rose by 5% has brought new hope and motivation to the cryptocurrency market and the financial industry. The intervention of regulators will promote the standardization and transparency of the market and provide investors with a safer and more reliable investment environment. The future of the cryptocurrency market is full of challenges, but also full of opportunities. Let us wait and see and witness this disruptive change together.

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The price of Bitcoin (BTC) has risen by 5% in the past 24 hours and is currently trading at $9,600, having previously reached a single-day high of $9,664. Bitcoin's overnight rise coincides with a surprise decision from the Office of the Comptroller of the Currency (OCC).

The OCC said on July 22 that banks in the United States are allowed to hold cryptocurrencies. Essentially, it approved that banks can operate cryptocurrency custody services, and within a day of the announcement, the cryptocurrency market surged. Along with Bitcoin, Ethereum (ETH) also saw a sharp rebound, with the price rising by 12%.

BTC USDT daily chart Source: TradingView

 Did the Bitcoin price react to the OCC decision?

In an official statement, Brian Brooks, the acting director of the OCC, said that banks could serve "tens of millions of Americans" by supporting cryptocurrency custody.

Brooks said: "From safe deposit boxes to virtual vaults, we must ensure that banks can meet the financial services needs of today's customers. This view shows that banks can continue to meet customers' needs to protect their most valuable assets, which today, for tens of millions of Americans, includes cryptocurrencies." 

In effect, this opens the door for banks to enter the cryptocurrency market and provide their customers with tools to invest in cryptocurrencies.

Throughout 2020, institutional funds flowing into Bitcoin have continued to increase, continuing to drive the cryptocurrency market up.

Grayscale said that its cryptocurrency products had inflows of $905.8 million in the second quarter of this year. Grayscale operates the Grayscale Bitcoin Trust, which had a total inflow of $1.4 billion in the first and second quarters of this year.

Bank-run cryptocurrency custody solutions can be an alternative to existing regulated Bitcoin investment tools. Investors may be bullish on this new development because it means official recognition and institutional investors can invest in the cryptocurrency market for the long term.

Peter Van Valkenburgh, director of research at the nonprofit CoinCenter, said:

“Accepting that centralized entities for full protection and storage of cryptocurrencies are inevitable and necessary is good news, and competition to provide these services will be more intense due to the OCC’s new policy. The entry of national banks expands competition and may also allow more traditional institutional investors to buy and sell cryptocurrencies.”

The sudden increase in demand for Bitcoin may have been driven by the OCC’s unexpected announcement.

Industry executives reacted positively, but with some skepticism The overall reaction to the OCC’s announcement was positive. Industry executives generally said that in the medium term, this could lead to more capital flowing into the cryptocurrency market.

However, Jake Chervinsky, an attorney at Compound Labs, stressed that the OCC is one of many regulators in the United States. It is unclear whether Brooks will serve as acting director for a long time.

Because banks act based on market demand, Chervinsky believes that it cannot guarantee a surge in the number of banks supporting cryptocurrency custody. He said:

“Banks are ultimately like any other business, they respond to customer needs. However, the OCC is just one of many regulators involved, Brian
Brooks may not be at the Office of the Comptroller of the Currency for long, and banks are psychologically risk-averse/compliance-focused.”

So it remains to be seen whether investors are simply using this news to push the market higher.

As an emerging digital asset, cryptocurrency has both risks and opportunities. The move of banks to custody cryptocurrencies undoubtedly provides investors with a safer and more reliable way to keep assets. The involvement of traditional financial institutions will further enhance the transparency and standardization of the market and provide investors with more choices and convenience. The surge in Bitcoin prices also reflects the market's positive response to this decision, boosting market confidence and investor confidence.