Bitcoin has been on a tear, smashing through the crucial resistance level at $71,000 recently. This surge in Bitcoin’s price has also sparked a corresponding surge in altcoins.
Recently, Bitcoin (BTC) shot up over $71,000, edging closer to its all-time high of $73,628. This rally comes just before the Federal Reserve meeting next week, with investors hopeful for rate cuts later in the year.
With recent economic data indicating a slowdown in inflation and softening job market conditions in the US, the case for a rate cut from the Fed is getting stronger. Lower interest rates are usually viewed as positive for speculative assets like Bitcoin. Tom Couture, a digital asset strategist at Fundstrat Global Advisors, noted in a recent investor note that “Crypto assets are responding positively to the decline in rates.”
Another factor driving the upward trend of Bitcoin is the significant inflows into spot Bitcoin Exchange-Traded Funds (ETFs). Blockchain researcher Collin Brown highlighted that spot Bitcoin ETFs saw a massive inflow of $887 million on Monday, the second-highest single-day net inflow since the launch of Bitcoin ETFs.
The total net asset value of BTC spot ETFs now stands at $61.46 billion, with major players like Grayscale Investments, Fidelity Investments, and BlackRock contributing to this surge in investment. Fidelity’s FBTC led the pack with inflows of over $378.7 million, followed by BlackRock’s IBIT with $275 million, and Ark Invest’s ARKB with $138.7 million. Even Grayscale’s GBTC, which initially saw large outflows, saw inflows of $28.2 million.
There are several indicators suggesting that Bitcoin may soon reach a new all-time high. Global demand for Bitcoin ETFs is increasing, with countries like Australia and Thailand jumping on board and offering these investment vehicles. This could lead to more adoption of Bitcoin and potentially drive up its price.
Additionally, the 30-day correlation between Bitcoin and the Nasdaq 100 is currently at its highest level since early 2023, indicating that further gains in the Nasdaq 100 could result in a rise in Bitcoin’s price. Currently, Bitcoin is up by 2.65% to $70,954.58.
The broader crypto market is also experiencing positive momentum, with Binance’s native token BNB surging over 10% in the last 24 hours to reclaim a market capitalization above $103 billion. Tocoin (TON) has climbed to the top ten cryptocurrencies after a 7% surge, while Shiba Inu (SHIB) in the memecoin space increased by nearly 8% to trade at $0.0000259, making it the 11th largest digital asset by market capitalization.