Bitcoin Rally Driven by Macroeconomic Factors, Not ETF Approval
The recent rally in Bitcoin is primarily fueled by macroeconomic factors rather than expectations of a spot Bitcoin ETF approval, according to a report by QCP. The report states that the rally was influenced by factors such as U.S. Treasury supply estimates and the anticipation of the Federal Reserve concluding its monetary tightening campaign. The smaller than expected Treasury Q1 supply estimate and dovish FOMC sent bond yields tumbling and risk assets soaring. However, it remains to be seen if this marks the start of a new global equity and bond uptrend.
Fed Rate Pause Supports Risk Assets
Max Shannon, an analyst at CoinShares Research, believes that most of Bitcoin’s recent upward movement is driven by weaker-than-expected U.S. payroll data, which suggests worsening economic conditions. Shannon also agrees with the QCP report’s analysis that the Fed’s rate pause and less hawkish tone provide support for riskier assets. Yields have dropped across the board, contributing to Bitcoin’s rally.
Spot Bitcoin ETF Narrative Still Influential
Matthew Graham, Managing Partner at Ryze Labs, argues that the current rally is primarily driven by anticipation of a spot Bitcoin ETF approval. He highlights that several traditional finance companies support this view. October’s false alarm about an approved spot Bitcoin ETF caught the attention of many investors who do not want to miss out on a potential rally as the price improves.
Ruslan Lienkha, Chief of Markets at YouHodler, notes that Bitcoin investors are following a “buy the rumor, sell the fact” pattern. Once spot ETFs are approved, it may be an opportune moment for investors to sell and secure profits.
Bullish Sentiment for Bitcoin Increasing
According to Michael Dunn, President of Bitnomial Exchange, bullish sentiment for Bitcoin is growing. Open interest in the futures and options market has reached all-time highs, and volatility has increased, indicating a potential upside for the market.
As of now, Bitcoin’s price stands at $34,665, with a slight increase over the past 24 hours. The cryptocurrency has been trading within a narrow range of $34,000 to $35,000 for about a week.
Hot Take: Bitcoin Rally Driven by Macroeconomic Factors and Anticipation of ETF Approval
The recent rally in Bitcoin can be attributed to a combination of macroeconomic factors and anticipation surrounding the approval of a spot Bitcoin ETF. While factors such as U.S. Treasury supply estimates and the Federal Reserve’s monetary tightening campaign have played a significant role in driving the rally, the narrative around a potential ETF approval continues to influence market sentiment. Investors are closely monitoring regulatory developments and are ready to capitalize on any positive news regarding ETF approval. Overall, bullish sentiment for Bitcoin remains strong, supported by factors such as weakening economic conditions and increasing open interest in futures and options markets.
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