The cryptocurrency markets have hit a two-month high, led by Bitcoin’s immense 10% move just this week. While the overall market has been in a 10-week long downtrend, the recent surge has managed to reclaim almost all of the losses since crypto’s YTD peak.
But with the SEC’s crypto crackdown not relenting, how has Bitcoin managed to return to $29,000?
TradFi Refuses To Shy Away From Cryptocurrency
While the regulatory landscape in the United States has not been favorable for crypto, it seems that traditional finance institutions are taking the opportunity to not shy away, but enter Web3.
Following Blackrock, a leading asset management firm, filing for a Bitcoin SPOT ETF, two other asset managers have officially put forth proposals for similar financial products.
EDX Markets, a cryptocurrency exchange launched by Citadel securities and backed by some of the heaviest hitters in capital markets, also launched yesterday (21st June), with four cryptocurrencies being offered on the platform.
Internationally, Germany’s largest bank, Deutsche Bank has applied for a digital asset custody license, which could make cryptocurrency more accessible for its more than 27 million customers.
Weakening U.S. Dollar a Good Sign For Bitcoin Price
The U.S. Dollar Index, also known as the DXY, recently hit a monthly low of 102, close to the bottom of its 52 week range.
Historically, Bitcoin and other risk assets have traded opposite to the DXY, with a low DXY correlating with bullish crypto price action.
With more countries shying away from the U.S. Dollar, with some even choosing to settle the majority of their trades in other currencies, the Dollar’s strength has started to wane.
Furthermore, while the U.S. Federal Reserve has yet to make any rate cuts, their recent decision to pause rate hikes during the previous FOMC meeting could be a good sign for crypto.
Equities, Tech Stock Rally Heralds Crypto Resurgence
While the cryptocurrency market continued to trend downward in Q2 2023, with the S&P 500 leading the way with a 13% rally over the first half of the year.
Companies like Apple and Microsoft also saw significant gains in the same period, but their growth were dwarfed by Nvidia, which saw a massive rally following their April earnings release, and swiftly rose to claim a $1 trillion market capitalization.
With tech stocks being historically correlated with the cryptocurrency market, its resurgence may have been a key catalyst for crypto’s current trend.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief