Bitcoin Records 5.9% Gain Amid Regulatory Uncertainty and Potential Macro Impact
Summary:
From June 2 to 5, Bitcoin recorded a 5.9% gain, backed by nearly $1 billion inflow into American Bitcoin spot exchange-traded funds. Despite optimistic conditions and a more receptive crypto approach by US lawmakers, Bitcoin didn't surpass the $72,000 mark. Matt Hougan, Bitwise's CIO, indicated ongoing regulatory uncertainty as hindering growth, but also noted a likely move towards clearer regulations in the US. Meanwhile, a report by FDIC revealed US financial institutions face $517 billion of accounting losses, which may negatively impact Bitcoin's price. As long as the stock and fixed-income market attracts investors, Bitcoin may face resistance in crossing the $71,000 line in the near future.
Between June 2 and 5, Bitcoin (BTC) managed to bag a 5.9% increase, reaching a peak at $71,746 before coming to a standstill. The rise was spurred by nearly $1 billion of investments into American Bitcoin spot exchange-traded funds, highlighting a robust demand from institutional investors. Despite encouraging factors such as a friendlier approach towards crypto by U.S. policymakers, Bitcoin couldn't break through the $72,000 mark.
Matt Hougan, Bitwise's chief investment officer, attributes this to regulatory uncertainties that discourage financial advisors from expanding their crypto portfolios. However, he is optimistic as the U.S. seems to be moving towards definitive regulation— an initiative kickstarted by Democrats' decision to overturn the U.S. SEC's Staff Accounting Bulletin 121. The SEC's approval of spot Ethereum ETFs is a further testament to the changing attitudes of U.S. regulators.
Despite positive steps, the journey isn't over as President Joe Biden's rejection of the SAB 121 repeal shows that the crypto landscape still needs further development.
A recent report by the Federal Deposit Insurance Corporation (FDIC) reveals that U.S. financial institutions currently bear $517 billion of accounting losses due to the detrimental effects of higher rates on their residential mortgage-backed securities. With 64 banks on the verge of bankruptcy in Q1 2024, there might be negative impacts on Bitcoin’s price shortly.
According to BitMEX co-founder Arthur Hayes, expansive monetary operations like printing more money could be favorable for finite assets like Bitcoin. However, if the stock and bond markets struggle, Bitcoin's price may take a hit, mirroring the drop to $19,559 before the March 2023 rally.
Naysayers might predict a price drop before the next Bitcoin rally, despite no guarantee of history repeating itself. Especially considering the impressive performance of U.S. tech stocks, which lessens the need for alternative assets. As long as investors find satisfaction in the fixed-income and stock market realm, Bitcoin, at least for the near future, may find it challenging to cross the $71,000 threshold.
Remember, this article serves informational purposes only and does not constitute either legal or investment counsel. The thoughts conveyed are just the author's personal beliefs and may not represent the perspectives of Cointelegraph.
Published At
6/5/2024 11:16:59 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.