The Bitcoin price has surged to a 2-month high of $29,450 today, reflecting a 3.3% increase within the last 24 hours. While several factors could have contributed to this rally, four principal drivers appear to dominate discussions.
#1 Expectations Of A Spot Bitcoin ETF Approval
There’s palpable excitement within the community as rumors intensify about the US Securities and Exchange Commission (SEC) potentially approving the first-ever spot Bitcoin ETFs. Currently, the SEC is actively engaging with prominent applicants including Grayscale, BlackRock, Fidelity, Invesco, and Ark Invest, among others. This has never happened before in the long history of Spot Bitcoin ETF rejections. It appears that the market may be starting to cautiously price in aka “front-run” the approval of a spot ETF.
Just yesterday, BlackRock filed its updated ETF application, adding more fuel to the fire. As James Seyffart, a Bloomberg ETF expert, elucidated, “BlackRock filed an updated Bitcoin ETF prospectus early this morning which is likely their response to SEC comments like we’ve seen from Ark, Fidelity, and others. Just more confirmation that issuers are in talks with the SEC.”
Forecasts surrounding this potential approval are overwhelmingly bullish. Macro analyst Alex Kruger predicts a 20%+ price surge on the day of approval, while trader Christopher Inks sets his sights between $38,000 to $40,000.
A recent CryptoQuant report posits that Bitcoin spot ETFs could swell the market cap by as much as $1 trillion, stating, “If $150 billion in fresh capital enters the Bitcoin market, it could increase BTC’s market cap by $450 billion to $900 billion.” Meanwhile, Matrixport’s research predicts a Bitcoin price range between $42,000 and $56,000 post-SEC’s approval of Blackrock’s ETF.
#2 Jerome Powell’s Latest Speech
In recent comments that have undoubtedly affected the crypto markets, Federal Reserve Chair Jerome Powell indicated the possibility of the central bank suspending its historic run of interest-rate hikes as long as there’s steady progress on inflation and rate hikes might be put on hold. Powell emphasized the importance of the 2% inflation target and addressed the balance between avoiding a potential recession and keeping inflation in check.
While raising rates too high risks a major recession, not raising rates high enough risks another inflationary breakout. According to current market forecasts, the Fed will…
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