Bitcoin made a comeback over the weekend, reaching around $28,000. While there were two positive developments regarding ETFs and Ferrari, it’s unclear if these were the main factors behind the price increase.
The first piece of good news came on Friday when the SEC dropped its appeal against the ruling in the Grayscale case. The ruling criticized the SEC for refusing to approve the conversion of the Grayscale Bitcoin Trust into an ETF and ordered the agency to proceed with approval. By dropping the appeal, the SEC has essentially accepted this ruling, making it likely that it will approve the application to convert GBTC into a spot bitcoin ETF.
The second positive development came from Ferrari, which announced that it had activated cryptocurrency payments. Initially, this payment method only applies to US dealers but may expand to Europe in the future. Customers will be able to buy a Ferrari using BTC, ETH, and USDC, with BitPay converting the cryptocurrencies into fiat currency at the time of payment.
Despite these news events, the price of bitcoin did not immediately rise on Friday or Saturday. The upward movement started on Sunday and continued on Monday morning. It’s worth noting that traditional exchanges were closed over the weekend, and Monday’s spike occurred during Asian trading hours.
There was also negative news out of China that may have impacted bitcoin’s price more significantly than the news from Friday and Saturday. Reports suggested that China’s low inflation rate could lead to deflationary risks and that the government was considering stimulating its economy through quantitative easing (QE). These reports could have prompted investors in Asian markets, including China, to buy bitcoin as a hedge against expansionary monetary policies.
Overall, while ETFs and Ferrari’s adoption of cryptocurrency payments are positive developments for bitcoin, it’s possible that other factors such as news from China played a more significant role in driving up its price.
Hot Take: Bitcoin Rises Amidst Positive News but China Remains Key
Despite the positive news surrounding ETFs and Ferrari, it’s clear that China’s economic situation and potential for quantitative easing had a greater impact on bitcoin’s price. As the hedge of choice against expansionary monetary policies, bitcoin’s risk-on nature allows for potential gains beyond traditional assets like gold. While the recent price increase is notable, it still falls within the range in which bitcoin has been trading since March. Moving forward, monitoring developments in China will continue to be crucial for understanding bitcoin’s trajectory.
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