Bitcoin experienced a 5.9% increase in value from June 2 to June 5, reaching a peak at $71,746 before its rally was temporarily paused. This surge was fueled by nearly $1 billion in investments into spot Bitcoin exchange-traded funds (ETFs) based in the United States, highlighting a strong demand from institutional investors.
Despite positive factors such as the growing unrealized losses in the U.S. banking sector and a more supportive stance towards cryptocurrencies from U.S. lawmakers, Bitcoin (BTC) failed to surpass the $72,000 mark.
The issue of regulatory uncertainty continues to linger, causing financial advisers to hesitate in increasing their exposure to cryptocurrencies. However, there are indications that the U.S. is moving towards regulatory clarity, as shown by the recent decision to repeal the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121.
The approval of spot Ether (ETH) ETFs by the SEC signals a shift towards a more crypto-friendly regulatory environment in the U.S. Despite setbacks, such as President Joe Biden’s veto of the SAB 121 repeal, it is evident that progress is being made.
A recent report from the Federal Deposit Insurance Corporation (FDIC) revealed that U.S. financial institutions are facing significant accounting losses due to the impact of higher rates on residential mortgage-backed securities. This has put 64 banks on the verge of insolvency in the first quarter of 2024.
Bitcoin’s price may face a decline in anticipation of negative macroeconomic events. The co-founder of BitMEX, Arthur Hayes, suggested that increasing the money supply could benefit assets like Bitcoin. He pointed to previous instances where Bitcoin’s price surged following collapses in the banking sector.
Investors are wary of a potential price correction before Bitcoin embarks on another rally. The precedent set in 2023, where Bitcoin’s price dropped before a significant surge, indicates that history may repeat itself. However, with ongoing inflows into U.S. spot Bitcoin ETFs totaling over $52 billion since January, the market remains optimistic.
The performance of U.S.-listed tech stocks and the overall stock market could impact Bitcoin’s price movement. A strong stock market performance may reduce interest in alternative assets like Bitcoin. Despite these factors, there is a possibility of Bitcoin reaching a new all-time high in 2024, as long as investor sentiment remains positive towards traditional markets.
This article serves as general information and should not be considered as legal or investment advice. The opinions expressed are solely those of the author and do not necessarily reflect the views of Cointelegraph.