Multiple institutions are expanding their cryptocurrency business, and bitcoin has surpassed $28,000 for the first time since the end of May.
Bitcoin has surpassed $28,000 for the first time since May, as multiple institutions expand their cryptocurrency business.
On the afternoon of June 20th, New York time, Bitcoin broke through $28,000 for the first time since May 29th.
According to Terminal data, as of 4:05 PM New York time, Bitcoin rose to $28,016, with a 24-hour increase of 5%. According to CoinGlass data, short sellers lost about $36.6 million in liquidation in the past 24 hours. This is the largest short position closing since May 28th.
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After several large traditional financial institutions announced their crypto plans, market sentiment turned optimistic.
Banking giant Deutsche Bank said on Tuesday that it has applied for a digital asset custody license in Germany. Financial giants such as Charles Schwab Jiaxin Wealth Management, Citadel Securities, and Fidelity Digital Assets have invested in the cryptocurrency exchange EDX Markets, which has opened trading of BTC, Ethereum, Litecoin and Bitcoin Cash (BCH).
Last week, investment management giant BlackRock submitted an application for a physically-backed Bitcoin ETF, which surprised the market and also pushed up the price of Bitcoin. This move has also had an impact on other Bitcoin products, such as Grayscale’s Bitcoin investment trust fund (GBTC), which has seen a 400% increase in trading volume.
While BlackRock is not the first company to apply for a Bitcoin ETF to the SEC, it is currently the largest among all applicants. Managing assets of more than $8.5 trillion, the company will also use Coinbase to host Bitcoin in the trust. So far, the SEC has refused to approve physically-backed Bitcoin ETFs, although companies including Cathie Wood’s ARK and 21Shares have submitted three applications.
Brent Xu, CEO and co-founder of the decentralized finance (DeFi) bond market platform Umee, told Coindesk: “The rise in Bitcoin is definitely related to all these large traditional financial institutions hoping to seriously engage with the digital asset ecosystem. It is clear that BlackRock, Fidelity and other companies’ customer groups hope to invest in Bitcoin and other crypto assets through ETFs and other more traditional investment tools. This partly offsets the impact of the relatively pessimistic regulatory environment in the United States, and it also seems to indicate that these large companies want a clearer and fairer regulatory environment than the current one.”
Bitcoin’s dominance has risen to its highest level in nearly two years, at 45.84%, according to data. The last time such a level was seen was in July 2021, when it reached a peak of 46.77%. This comes after the US SEC sued cryptocurrency exchanges Binance and Coinbase and declared multiple tokens as unregistered securities.
USD index cools, halving event bullish
Another positive signal is the cooling of the US dollar index (DXY). Historically, when the DXY index falls, sentiment towards risky assets such as Bitcoin increases. With the Fed pausing rate hikes last week, some market participants believe that the US economy could grow and the US dollar could continue to cool. If this happens, Bitcoin could continue to rise alongside the stock market. The better the macro environment, the more favorable it is for Bitcoin prices.
The upcoming Bitcoin halving in April or May 2024 may also be a factor. The Bitcoin halving occurs approximately every four years and reduces the reward for mining new Bitcoin blocks by half, effectively decreasing the speed of new Bitcoin production in order to control inflation and maintain the scarcity of Bitcoin. The upcoming halving will reduce block rewards from 6.25 BTC to 3.125 BTC. JPMorgan analysts predicted at the end of last month that the upcoming halving could help Bitcoin reach a price of $45,000.
MicroStrategy founder and chairman Michael Saylor said earlier this week in an interview with Bloomberg that he expects BTC to rise tenfold from around $25,000 and then rise tenfold again. He said, “The whole industry is going to rationalize down to Bitcoin and maybe six to ten other POW tokens.”
Author: BlockingBitpushNews Mary Liu
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