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An Uplifting Trend for Bitcoin
On June 20, the value of Bitcoin witnessed a substantial increase, climbing past $28,000 and marking a 14-day peak at $28,103. This upswing in BTC value, despite recent negative news about the SEC's clampdown on Binance and Coinbase, has left bullish investors optimistic about breaking Bitcoin's 10-week dip.
The surge seems to be primarily fueled by increasing institutional interest in Bitcoin, most notably from financial giants BlackRock and Fidelity Investments, both of which appear to be filing for a spot Bitcoin ETF.
Let's delve into the various factors contributing to Bitcoin's price ascension today.
BlackRock's ETF Filing Fuels Bitcoin's Upward Momentum
Bitcoin's price began its rally after BlackRock applied for a spot BTC ETF in the United States on June 15. Even though BlackRock isn't the first firm to submit an application for a Bitcoin ETF to the SEC, it is the largest among all current applicants.
Despite multiple applications, including ones from Cathie Wood's ARK and 21Shares (which has applied three times), the SEC has so far refrained from approving a spot Bitcoin ETF. Grayscale was another firm that saw its Bitcoin ETF application rejected, after which it appealed to the court, arguing in favor of Bitcoin futures' soundness.
BlackRock, the world's biggest asset manager boasting over $8.5 trillion in assets under management, plans to utilize Coinbase for custodianship of the BTC held in the trust, as per their filing with the SEC.
The Grayscale ETF has also benefitted from the application, with its discount nearing its 2023 peak and currently sitting under 37%.
A Cooling US Dollar Index: Good News for Bitcoin
Another encouraging signal for Bitcoin's price is the receding U.S. dollar index (DXY). Historically, a decline in the DXY index tends to buoy sentiment for risk assets like Bitcoin.
In light of the Federal Reserve's recent decision to halt interest rate hikes, some market watchers believe that this could lead to further growth in the U.S. economy and a continued softening of the dollar. Should this scenario unfold, Bitcoin's rally could continue alongside the equities markets. Simply put, a more favorable macroeconomic environment typically bodes well for Bitcoin's price.
Although Bitcoin's price is exhibiting short-term bullish momentum in the wake of BlackRock's news and the relaxing dollar, the Bitcoin Fear & Greed Index has hit a three-month high. Conversely, some analysts predict that Bitcoin's price will remain relatively stagnant for at least the next year and a half.
