Bitcoin has recently rebounded past the important threshold of $100,000, marking a significant recovery three months after it fell below this level. Prior to this, the price of Bitcoin had dropped sharply by 32% from its historical high in January. This rebound has been primarily driven by favorable macroeconomic conditions, such as easing trade tensions and a more dovish stance from the Federal Reserve, reflecting a general shift in investor sentiment. Notably, over $920 million in ETF inflows in the past two weeks has propelled Bitcoin's market capitalization to unprecedented heights. Additionally, recent on-chain metrics show a decrease in the amount of Bitcoin held at a loss, with over 3 million BTC returning to profitability. With the continued increase in trading volume, Bitcoin's robust structural integrity has been strengthened, indicating that any short-term downturns may be quickly alleviated, thereby enhancing bullish momentum.
Currently, the Federal Reserve is maintaining interest rates amid concerns about inflation and unemployment, posing a risk of stagflation. Fed Chair Jerome Powell has clearly expressed uncertainty about future economic conditions and emphasized the need for more data before taking any further policy intervention measures. Despite market speculation that the Fed might cut rates before July, the Fed remains vigilant, prioritizing price stability over rapid economic recovery.
In terms of regulation, although obstacles remain, institutional interest in the cryptocurrency space is warming up. New Hampshire has taken proactive measures by enacting legislation that allows investments in cryptocurrencies and tangible assets, marking an important shift in the state's digital asset policy. Meanwhile, BlackRock has collaborated with the U.S. Securities and Exchange Commission (SEC) to enhance the regulation of cryptocurrency ETFs, advocating for collateral measures, with a particular focus on Ethereum-based products. This proactive approach by the SEC highlights its commitment to shaping the evolving digital asset landscape.
