Cryptocurrency-linked stocks rallied sharply on Friday after the U.S. Securities and Exchange Commission unveiled a five-year Innovation Exemption for tokenized stock trading, while Bitcoin reclaimed the $80,000 level for the first time in two weeks.
Strategy, formerly MicroStrategy, climbed about 12%, with shares earlier trading at $136.60 in premarket action. Coinbase Global surged 10%, MARA Holdings rose 9%, Robinhood Markets added 7.5%, Galaxy Digital gained 7%, and Circle Internet Group added 6%. Bitcoin itself climbed more than 5% to move above $80,000, after consolidating between roughly $75,000 and $78,000.
The SEC's new framework provides tokenized securities venues with a five-year exemption from certain rules that apply to traditional exchanges such as Nasdaq and the New York Stock Exchange. It also covers some liquidity providers with a five-year exemption from dealer registration requirements.
Under the exemption, tokenized NMS stocks must give holders the same rights and privileges as equivalent traditional shares, including dividend and voting rights. Platforms must notify companies before listing tokenized shares, cannot proceed if issuers object, and must halt tokenized trading when the underlying stock is halted. Synthetic tokens that provide stock exposure through derivatives are not permitted. SEC Chairman Paul Atkins said the exemption aims to support on-chain trading while maintaining investor protections.
The Commodity Futures Trading Commission also issued a no-action position covering certain passive software providers working with regulated entities, adding to the positive sentiment.
The gains came despite a challenging week: the Clarity Act failed in the Senate on Tuesday and the Federal Reserve raised interest rates for the first time in more than three years on Wednesday. Markets absorbed both events, with investors already expecting the Clarity Act to fail and oil prices retreating enough to reduce pressure for further tightening.
From a technical perspective, Strategy traded about 5.2% above its 20-day simple moving average of $129.57 and 24.3% above its 50-day SMA of $109.61, but remained just below its 200-day SMA of $137.13. Baird reiterated a Neutral rating on Coinbase with a $130 price target, describing the SEC's development as positive for the exchange and its broader Everything Exchange strategy.
