Cryptocurrency Market Rises Amid Inflows into Bitcoin ETFs & Coinbase's Australian Expansion
Summary:
The cryptocurrency market showed a significant rise today, with Bitcoin and Ether leading the way. The uptick aligns with renewed inflows into U.S.-based Bitcoin exchange-traded funds, as well as Coinbase's plans to penetrate Australia's growing pension market. These trends suggest increasing acceptance of cryptocurrencies within the traditional finance sector. The fall in U.S. bond yields also indicates a shift among investors toward riskier assets. Technical analysis predicts a further rise, reaching potentially up to $3.03 trillion by June.
Today, the cryptocurrency market has seen an increase, with the total market value going up roughly 2.50% over the past 24 hours, hitting $2.35 trillion as of May 17. This includes growth from big players such as Bitcoin (BTC) and Ether (ETH), which have surged by approximately 2% and 4% respectively on the same day. Influencing this uptick are the continuous inflows into Bitcoin exchange-traded funds in the U.S., as well as Coinbase's expansion plans for Australia's sizable $2.5 trillion pension sector.
Recently spotted trends in the cryptocurrency market appear to be in step with the renewed inflows into Bitcoin ETFs in the United States. As of May 16, these funds managed about $12.40 billion worth of Bitcoin, a significant lift from the $11.18 billion at the start of the month. Interestingly, more than 600 businesses have reported having Bitcoin ETFs amongst their holdings.
Global banking powerhouse JPMorgan has revealed sizable stakes across various Bitcoin ETFs in the market. Their diverse investment roster includes Bitcoin ETFs from well-established names such as BlackRock, Fidelity, and Bitwise, with each investment going beyond the $1 million mark. Meanwhile, banking giant Wells Fargo has also disclosed its Bitcoin ETF exposure in a recent filing with the U.S. Securities and Exchange Commission, boasting ownership of 2,245 shares of Grayscale's Bitcoin ETF.
These financial disclosures reflect the widening acceptance of Bitcoin and other cryptocurrencies within the traditional financial industry, which significantly contribute to the market's current valuation. Diminishing bond yields in the U.S. alongside the increasing cryptocurrency market suggests investors shifting toward higher-risk assets amid underwhelming returns in the Treasury sectors.
Such a trend largely came about after the U.S Federal Reserve's Federal Open Market Committee announced they would not hike interest rates until inflation stabilizes. Following a cooling down of the U.S. Consumer Price Index, bond traders have expedited their anticipation for the first rate cut from November to September. An outlook for lower interest rates historically aligns with bullish tendencies in the cryptocurrency market.
Coinciding with today's positive turn in the cryptocurrency market, U.S. crypto exchange Coinbase has announced plans to target the fast-growing self-managed pensions sector in Australia, which constitutes about a quarter of the country's $2.5 trillion pension system and already hosts more than $664 million in cryptocurrency allocations. This move by Coinbase could potentially boost institutional involvement and spur wider adoption, thereby supporting the ongoing rally in the cryptocurrency market.
From a technical viewpoint, the market's advances today are attributed to a bounce back that was initiated at a support confluence consisting of the 100-day exponential moving average and the lower trendline of the current downward triangle pattern. The bullish continuation pattern in an upward trend usually resolves when prices break above the upper trendline, climbing by the triangle’s maximum elevation. By the rules of this technical principle, the cryptocurrency market could potentially reach between $2.72-$3.03 trillion area by June, based on the exact breakout spot. This piece should not be taken as investment advice or recommendations. All investment and trading actions come with associated risks, hence readers are encouraged to conduct personal research prior to making investment decisions.
Published At
5/17/2024 2:45:44 PM
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