Key Highlights:
- Bitcoin reached a new high, breaking the ceiling at $123,000 before falling slightly.
- Bitcoin-oriented treasury company, Strategy previously known as MicroStrategy announced an impressive $472.5 million bitcoin purchase.
- United States-based spot bitcoin ETFs recorded an injection of over $1 billion last week.
- The U.S. House of Representatives is set to vote on three bills focused on digital currency this week: the CLARITY Act, Anti-CBDC Surveillance Act, and GENIUS Act.
The cryptocurrency market is demonstrating its resilience yet again with Bitcoin, the biggest digital currency by market cap, making new records. Recently, Bitcoin crossed the $123,000 mark before retreating slightly.
Factors Driving Bitcoin To New High
The surge in the value of Bitcoin can be primarily attributed to increased institutional interest and regulatory optimism. Amongst the institutional players, Strategy (now MicroStrategy) and spot bitcoin exchange-traded funds (ETFs) have shown strong buying momentum. The anticipation of Crypto Week, expected to bring regulatory clarity, has also provided a significant boost to the market price.
Bitcoin Purchase by Strategy
Bitcoin has been the darling of many institutional investors and Strategy stands out among them. After a brief pause from its weekly purchase announcement, Strategy revealed that it bagged 4,225 more bitcoins for an astounding amount of $472.5 million. This was implemented with the funds garnered from various at-the-market offering programs, taking its total Bitcoin treasury to an impressive 601,550.
Increasing Popularity Of Spot Bitcoin ETFs
Adding further steam to the Bitcoin rally are the spot Bitcoin ETFs which were extremely active last week, attracting significant investment. As these products hold bitcoin as their underlying asset, the need to purchase more bitcoin increases as more investors purchase the ETF, adding an upward pressure to the price of Bitcoin. In fact, spot Bitcoin ETFs witnessed a whopping $1 billion worth of net inflows towards the end of the week as per data from Farside Investors. The total influx for the entire week amounted to roughly $2.7 billion, with Blackrock’s iShares Bitcoin Trust cornering majority of the funds.
Anticipation ahead of Crypto Week
One of the key factors appearing to favor the rising bitcoin prices is the beacon of regulatory clarity expected to emanate from the upcoming Crypto Week. In this much-awaited week, the U.S. House of Representatives is slated to vote on three key crypto-related bills- the CLARITY Act, Anti-CBDC Surveillance Act, and the GENIUS Act. Significantly, the CLARITY Act aims to provide clear guidelines for the regulatory classification of different digital assets whilst the GENIUS Act proposes a regulatory structure tailored for stablecoins.
Matt Hougan, Bitwise CIO, expressed his views on the bearing of ‘Crypto Week’ legislation on the crypto market, stating that it will help mitigate the risks and downside volatility in the market. Referring to past scandals related to entities like FTX, Luna, and Celsius, he emphasized the importance of putting reasonable regulations in place and also predicted that 70%+ drawdowns are seemingly a thing of the past. The importance of such regulations cannot be stressed enough, since, in his opinion, the past downturns were largely because of a lack of such regulatory norms.
