Bitcoin (BTC-USD) briefly surged above $30,000 on Friday following the Securities and Exchange Commission's decision to drop legal charges against two Ripple Labs cryptocurrency executives.

This development marked a significant victory for the cryptocurrency industry, which has been grappling with regulatory challenges.

The cryptocurrency market experienced a 5% jump in Bitcoin's value over the last day, pushing it above the $30,000 threshold for the first time since August. Other digital assets, including Ripple's XRP token (XRP-USD), also saw gains. Year-to-date, Bitcoin has rallied over 80%.

This surge in Bitcoin's value came at the end of a tumultuous week for crypto investors, who found reasons for optimism amidst various legal developments and market rumors involving the SEC, which has been actively pursuing regulatory actions against the cryptocurrency industry. The SEC has initiated lawsuits against major players like Coinbase (COIN) and Binance.

The positive developments began last Friday when reports suggested that the SEC would not appeal a court ruling that improved the likelihood of asset manager Grayscale Investments launching a spot Bitcoin exchange-traded fund (ETF). Asset managers have long sought SEC approval for a spot Bitcoin ETF, which would allow investors to access the cryptocurrency without owning it. The SEC had previously rejected such applications, citing concerns about market manipulation.

Following this news, Bitcoin saw significant support. According to Sean Farrell, a digital asset analyst with Fundstrat, "Once the SEC announced that they would not be pursuing an appeal, we saw a very compelling bid."

On Monday, a rumor circulated that BlackRock, a major investment management firm, had received SEC approval for a spot Bitcoin ETF, pushing Bitcoin's price closer to $30,000. However, prices retraced when BlackRock denied the rumor. The SEC is still reviewing applications from BlackRock, Grayscale, and others, with a decision expected by January 10.

Bitwise's Chief Investment Officer, Matt Hougan, expressed optimism about the prospects for a spot Bitcoin ETF, citing the evolution of the cryptocurrency market: "The SEC has previously been worried about market manipulation and a lack of market maturity, but the Bitcoin market today is not the same as it was a few years ago."

The recent rally in digital assets was also driven by the SEC's decision to dismiss charges against Ripple co-founders Brad Garlinghouse and Chris Larsen. They were previously sued for their role in helping Ripple sell XRP. The SEC had argued that the token's sale constituted a violation of US law because XRP was not registered as a security with the SEC. Although the judge ruled that XRP was not a security when purchased by the general public, it was considered a security when sold to institutional investors. Nevertheless, the SEC decided to drop charges against Garlinghouse and Larsen, opting for a financial settlement with Ripple instead. Photo by AntanaCoins, Wikimedia commons.