Bitcoin experienced a 5.9% increase from June 2 to 5, reaching a high of $71,746 before the rally came to a halt. This upward movement was supported by nearly $1 billion flowing into United States-based spot Bitcoin exchange-traded funds (ETFs), highlighting strong demand from institutional investors.
Despite positive factors such as a more crypto-friendly approach from U.S. lawmakers, Bitcoin (BTC) failed to break through the $72,000 mark. The regulatory landscape remains uncertain, with financial advisers hesitant to increase their exposure to cryptocurrencies due to this uncertainty. However, there are signs that the U.S. is moving towards regulatory clarity, especially after the repeal of the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121.
The approval of spot Ether (ETH) ETFs by the SEC indicates a shift towards a more crypto-friendly stance from U.S. regulators. However, President Joe Biden’s veto of the SAB 121 repeal suggests that there is still a long way to go for crypto regulation in the U.S.
A recent report from the Federal Deposit Insurance Corporation (FDIC) revealed that U.S. financial institutions are facing $517 billion in accounting losses due to higher rates impacting their residential mortgage-backed securities. Additionally, 64 banks were on the verge of insolvency in the first quarter of 2024.
Arthur Hayes, co-founder of BitMEX, argued that printing more money could be a likely solution to economic challenges, benefiting scarce assets like Bitcoin. He pointed out that Bitcoin’s previous bull run in March 2023 was triggered by the collapses of Silicon Valley Bank and Silvergate Bank, suggesting a similar pattern could emerge in 2024.
Investors may anticipate a price correction before a potential Bitcoin rally, especially if negative macroeconomic events impact the stock and bond markets. While there are no guarantees, historical trends suggest that Bitcoin’s price could drop before making significant gains.
Overall, the outlook for Bitcoin in 2024 remains positive, with ongoing inflows into U.S. spot Bitcoin ETFs contributing to a bullish sentiment. However, a strong stock market performance and investor comfort with traditional assets may limit Bitcoin’s immediate growth potential, keeping prices below $71,000 in the near term.
This article serves as general information and should not be construed as legal or investment advice. The opinions expressed here are solely those of the author and do not necessarily represent the views of Cointelegraph.