Bitcoin Gains Commodity Status, Drops to $70K Despite SEC Ruling
U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins announced Tuesday that the agency, along with the Commodity Futures Trading Commission (CFTC), had jointly classified Bitcoin and 15 other tokens as digital commodities, not securities, a move cheered by attendees at a crypto conference. The announcement resolves a key legal question that has long shadowed the cryptocurrency industry.
The reclassification shifts oversight of Bitcoin, Ethereum, Solana, XRP, and 12 other tokens from the SEC’s enforcement-focused securities regime to the CFTC’s commodity oversight framework. This distinction is expected to unlock approvals for exchange-traded funds (ETFs), allowing exchanges to list these assets without legal risk and potentially attracting institutional investors who had previously remained on the sidelines.
The market reacted with initial optimism, with Bitcoin briefly trading near $75,400 following the announcement. But, by Thursday morning, Bitcoin had fallen to $69,370. Strategy, the largest corporate Bitcoin holder, experienced a 6.5% decline as the value of its 761,068-coin treasury dipped below its cost basis of approximately $75,696 per coin.
The regulatory shift occurred alongside broader macroeconomic developments. The Federal Reserve held interest rates steady Wednesday, signaling a potential single rate cut in 2026. Fed Chair Jerome Powell indicated that geopolitical factors, particularly events in the Middle East, would significantly influence inflation. Brent crude oil prices surged to $119 intraday Thursday following an Iranian strike on Qatari energy infrastructure, and the S&P 500 broke below its 200-day moving average for the first time since May.
On-chain data from Lookonchain revealed that at least two long-term Bitcoin holders liquidated over 1,650 BTC, worth approximately $117 million, early Thursday. Coinbase Chief Legal Officer Paul Grewal remarked that he could not have foreseen this outcome in 2023. Polymarket’s contract predicting Bitcoin’s price in 2026 shows a 47% probability of the cryptocurrency falling to $45,000 or lower before the complete of the year, and only an 18% chance of it reaching $120,000.
At $45,000, Strategy’s Bitcoin holdings would represent a roughly $23 billion unrealized loss against its $57.6 billion cost basis. The stock’s net asset value (NAV) premium has begun to compress as Bitcoin’s price falls below the company’s average entry price. Coinbase CEO Brian Armstrong has sold over 1.5 million shares, worth roughly $545 million, since April 2025, without making any purchases.
Polymarket currently assigns only a 7% probability to a U.S.-Iran ceasefire by March 31. The prevailing market sentiment suggests that the oil-driven macroeconomic headwinds impacting crypto, equities, and gold are unlikely to ease until those odds improve. While the SEC’s regulatory clarity may prove significant in the coming months, the immediate market response has been dominated by the impact of rising oil prices.