Bitcoin has recently reached a one-year high, trading above $30k, which is a significant milestone for the cryptocurrency. This has led many to speculate about the reasons behind its sudden surge. Interestingly, Bitcoin has continued to rise even as the US dollar has strengthened against other fiat currencies, which is highly unusual.
Despite the strengthening of the US dollar, Bitcoin has remained resilient and continued to climb higher. For example, the EUR/USD exchange rate dropped from 1.10 to 1.0850 on news that the European PMIs weakened more than the market expected, while the GBP/USD dropped on weak UK data. All in all, while the dollar strengthened last week, it did not gain against Bitcoin.
So, what is driving the Bitcoin price higher? By now, it is clear that the dollar’s weakness did not drive the move higher. Therefore, something else must be the cause of this bullish breakout. Two possible explanations exist.
The first is related to BlackRock, the American multinational investment company, which is one of the largest in the world. News recently surfaced that the company submitted an application for a spot Bitcoin ETF designed to track the underlying market price of Bitcoin. This has led some to speculate that BlackRock might know something in advance, and this has created a buzz in the market. If BlackRock does launch a Bitcoin ETF, it could have a significant impact on the cryptocurrency market and drive-up demand for Bitcoin.
The second explanation is related to recent SEC lawsuits, which have created more transparency in the cryptocurrency industry. This increased transparency may be building trust among investors, making them more likely to invest in Bitcoin and other cryptocurrencies. A more transparent industry should be a positive for crypto investors, and this may be driving up demand for Bitcoin, as investors seek to capitalize on the potential returns offered by the cryptocurrency.
Despite the US dollar’s strength against other currencies, Bitcoin has continued to rise, which is a positive sign for those who believe in the long-term potential of the cryptocurrency. However, it is worth noting that the verdicts on Binance and Coinbase could impact the cryptocurrency market in unpredictable ways. It is important to be cautious and do your research before making any investment decisions in the cryptocurrency market.
Source: Coin Journal
