#NFT and Cryptocurrency# FX168 Financial News Agency (Asia-Pacific) reported that Bitcoin prices surged on Monday (October 20), breaking back above the US$110,000 mark. This boosted cryptocurrency-related stocks, with Yahoo Finance noting that it has reignited hopes that the market volatility this month is merely a temporary hiccup rather than a sign of cyclical change.

(Bitcoin Year-to-Date Chart Source: Yahoo Finance)

Linh Tran, market analyst at online broker XS.com, wrote on Monday: ‘Bitcoin is currently in a phase of re-accumulation following a short-term adjustment, with market sentiment stabilizing and institutional demand remaining resilient.’

As Bitcoin prices rose, Strategy’s shares climbed more than 2% on Monday. In its latest filing with the U.S. Securities and Exchange Commission (SEC), the company disclosed that it purchased an additional 168 Bitcoins between October 13 and 19 at an average price of US$112,051.

The filing shows that Strategy currently holds a total of 640,418 Bitcoins, with a total purchase cost of approximately US$47.4 billion.

Cryptocurrency-related stocks surged across the board.

Trading platforms Robinhood and Coinbase rose nearly 4.5% and 2.5%, respectively, on Monday. Circle, a stablecoin issuer, also gained 3.5% amid growing momentum in the digital asset space.

Cryptocurrency mining companies also performed remarkably well. These enterprises, in addition to mining, are applying high-performance computing (HPC) infrastructure to artificial intelligence fields.

MARA Holdings, a Bitcoin miner, soared nearly 6% on Monday as the company aggressively expands into HPC data centers and artificial intelligence. Its peer Bit Digital surged 15%, while Cipher Mining jumped 6%.

(Performance of cryptocurrency-related stocks. Source: Yahoo Finance)

Japan Reports a Major Development

On Monday, reports emerged that Japan’s primary financial regulator is considering revising policies to permit Japanese banks to hold Bitcoin and other cryptocurrencies. This move signals increasing institutional acceptance and further fuels market optimism.

Under Japan’s current regulatory framework, banks are essentially prohibited from holding crypto assets, such as Bitcoin, as part of their investment portfolios.

If banks are allowed to hold crypto assets, it would mean that traditionally large-scale, well-regulated funds within the banking system could become buyers and holders of crypto assets, thereby enhancing the perception of these assets (particularly Bitcoin) as moving toward becoming ‘mainstream institutional assets.’

As a mature and advanced economy, any shift in Japan’s regulatory stance may have a demonstrative effect globally, with other countries or regions potentially adopting its model as a reference.

For Japan’s market, if banks participate in the crypto space, it could drive improvements in custodial services, integration between trading platforms and banks, increased confidence among retail and institutional investors, and an overall rise in market liquidity and recognition.

Meanwhile, if crypto assets are categorized alongside traditional asset classes like stocks and bonds, investors (including institutions and high-net-worth individuals) may find it easier to incorporate them into their asset allocation strategies.

As Bitcoin surged, other digital assets also posted gains on Monday, with Ether rebounding to $4,000 after falling to $3,700 last week.

Robert Mitchnick, Head of Digital Assets at BlackRock, pointed out that the recent minor collapse of Bitcoin and the significant sell-off of other digital assets were driven by highly leveraged speculative trading, particularly on offshore futures exchanges.

Mitchnick noted that futures contracts held by these offshore exchanges account for less than 2% of the total Bitcoin holdings but represent the majority of daily trading volume.

Mitchnick said, “Over time, more sophisticated long-term buy-and-hold investment activities will dominate, but they will not be affected by short-term noise.”