Bitcoin experienced a 5.9% increase from June 2 to 5, reaching a peak of $71,746 before its rally was halted. This surge was supported by nearly $1 billion flowing into spot Bitcoin exchange-traded funds (ETFs) based in the United States, indicating a strong demand from institutional investors.
Despite positive factors such as a more crypto-friendly approach from U.S. lawmakers, Bitcoin (BTC) failed to break above the $72,000 mark. Regulatory uncertainty remains a hindrance for financial advisors looking to increase their exposure to cryptocurrencies, as mentioned by Matt Hougan, the chief investment officer at Bitwise. However, Hougan is optimistic about the U.S. moving towards regulatory clarity, especially after the Democrats voted to repeal the SEC’s Staff Accounting Bulletin 121.
The approval of spot Ether (ETH) ETFs by the SEC signals a shift in the U.S. regulatory stance on cryptocurrencies, following several legal defeats, including Grayscale’s Bitcoin Trust conversion. President Joe Biden’s veto of the SAB 121 repeal highlights that the crypto industry still has a long road ahead.
A recent FDIC report revealed that U.S. financial institutions are facing $517 billion in accounting losses due to the impact of higher rates on their assets. This has led to 64 banks teetering on the brink of insolvency in the first quarter of 2024.
BitMEX co-founder Arthur Hayes believes that printing more money could be a solution to economic woes, benefiting scarce assets like Bitcoin. He predicts that Bitcoin’s price could drop ahead of negative macroeconomic events, similar to the pattern observed in March 2023 when Bitcoin’s price surged after the collapses of Silicon Valley Bank and Silvergate Bank.
Investors may anticipate a price correction before a potential Bitcoin rally, considering the uncertain market conditions. Despite this, the consistent inflows into U.S. spot Bitcoin ETFs totaling over $52 billion since January could support another price surge.
While the stock market continues to perform well, with tech stocks like NVidia pushing the S&P 500 index to new highs, there may be less incentive for investors to flock to alternative assets like Bitcoin. Influencers and social media posts impacting stocks like GameStop could also divert attention away from cryptocurrencies.
In conclusion, Bitcoin may still achieve a new all-time high in 2024, but obstacles like a strong stock market and regulatory uncertainties could prevent a significant breakthrough in the near future. This article serves as general information and should not be considered legal or investment advice. The opinions expressed are solely those of the author and do not necessarily reflect the views of Cointelegraph.