Bitcoin Eyes $29K, Defying Fresh Crypto Lawsuit, Rate Fears

Bitcoin (BTC) was holding a modest gain at $28,600 midday Thursday despite news that might have been expected to send the crypto sharply lower.

The state of New York earlier today filed a lawsuit against Digital Currency Group, its subsidiary Genesis Global Capital and crypto exchange Gemini alleging fraud to the tune of more than $1 billion.

Alongside, interest rates continue their sharp rise, with the 10-year U.S. Treasury yield up another 6 basis points to 4.97%, threatening to top 5% for the first time since prior to the global financial crisis. That, in turn, has sent stocks lower for a second consecutive day.

Bitcoin, however, remains higher by 1% to $28,600 after earlier in the session having made a brief run to just shy of $29,000.

Most large-cap alternative cryptocurrencies – altcoins – traded flat, with ether (ETH), Binance-adjacent token BNB, Polkadot’s DOT, dogecoin (DOGE) slightly down. Solana (SOL) defied the trend, jumping 5% during the day.

The CoinDesk Market Index (CMI), which tracks a basket of digital assets including BTC with the largest weight, was slightly up 0.3%.

Also at work were U.S. Federal Reserve Chairman Jerome Powell’s remarks at the Economic Club of New York. He said that inflation is still too high but rising long-term bond yields could mean less need for further interest rate hikes. Powell signaled the Fed will likely keep rates unchanged in November but kept the option open for a potential hike in December.

The lawsuit hasn’t appeared to impact the Grayscale Bitcoin Trust’s (GBTC) share price, which was up near 2% during the day, per TradingView data. Asset manager Grayscale, another subsidiary of DCG, intends to convert its massive $15 billion bitcoin investment vehicle into an exchange-traded fund (ETF). The firm bagged a court victory against the U.S. Securities and Exchange Commission (SEC) in August for denying its application for conversion. The SEC failed to appeal the decision last week.