- Bitcoin recorded a new all-time high (ATH) weeks before the halving.
- Exec credited the growth for Bitcoin ETFs.
The wait is finally over! Bitcoin [BTC] broke records by rising to a new ATH of over $72,000. This breakthrough is accompanied by crucial regulatory improvements. The UK Financial Conduct Authority (FCA) has expressed its willingness to welcome crypto-backed exchange-traded notes (ETNs) aimed at institutional investors.
Moreover, the London Stock Exchange has announced that it will start accepting applications for Bitcoin Ethereum [ETH] ETNs in the second quarter of this year.
Zach Pandl, Managing Director of Research at Grayscale Investments, sheds light on how these developments could fuel BTC demand. Speak to Fox Business, he noticed:
“We’re seeing a continued maturation of the asset class… which started with the ETFs here in the US market; we see other jurisdictions offering a wider range of products to investors, something that I think could continue to drive demand for Bitcoin over time.”
How sustainable is the current bull market?
The director credited Bitcoin’s exceptional performance for the increased demand for new places Bitcoin ETFs, which have attracted approximately $10 billion in investments since their inception in early January.
He emphasized the cyclical nature of the market and highlighted the current momentum that indicates we are in a bull market phase. Pandl therefore anticipated the possibility of continued price increases.
Given Bitcoin’s status as a macro asset, Pandl advised investors to pay close attention to inflation and Federal Reserve policy. These factors are crucial for evaluating the sustainability of Bitcoin’s current bull market.
Advice from JPMorgan CEO to the Fed
Meanwhile, JPMorgan CEO Jamie Dimon, an outspoken Bitcoin skeptic, advised the Federal Reserve to delay interest rate cuts until after June to boost the credibility of its fight against inflation.
During a livestream of the Australian Financial Review business summit from New York, Dimon emphasized the importance of data dependence, suggesting the Fed could always make quick and significant cuts later. He claimed,
“Their credibility is somewhat at stake here. I would even wait until June and let it all play out.”
Currently, markets expect an 84% chance of a Fed rate cut in June, with expectations of a total easing of 90 basis points over the year.
Bitcoin bulls need to watch out for the upcoming elections
When asked about the importance of the upcoming US elections regarding cryptocurrency, Pandl pointed this out many discussions in the current Congress about cryptocurrency have been bipartisan.
He suggested the possibility of legislative progress, such as the regulation of stablecoins, regardless of the outcome of the election.
The director noted:
“Bitcoin competes with the US dollar and physical gold, so we need to look at things like the amount of budget deficits expected, how much debt growth we can expect in the US and what the risks of inflation are.”
Such macroeconomic indicators could increase demand for Bitcoin and other cryptocurrencies beyond the direct effects of targeted legislative changes.