Despite the SEC’s ongoing crackdown on Web3, it seems that the largest cryptocurrency by market capitalization, Bitcoin, may finally be breaking out of a multi-month downtrend.
Despite a notable 76% surge from the yearly open to April, Bitcoin has since retraced, surrendering some of its gains and entering into a downtrend.
Aligned with this observation, numerous traders have taken to social media to highlight Bitcoin’s significant downtrend, emphasizing its repeated rejections after the initial decline from the $30,000 mark.
However, recent news have spurred a resurgence in price action, with Bitcoin finally peaking above $27,000 over the weekend.
With that said, could we finally see a sustained rally for the bulls, or will the bears continue to win out in 2023?
Blackrock ETF: A Sure Win For Bulls?
Blackrock, a leading asset management that boasts over $10 trillion in assets under management, recently filed for a Bitcoin ETF despite ongoing regulatory concerns.
While such a catalyst may have usually spurred strong bullish momentum, it seems that speculators have largely ignored the event.
Regardless, the entry of a financial behemoth such as Blackrock will have strong, lasting effects on Web3.
For one, a Bitcoin ETF has yet to be approved in the United States, with Cathie Wood’s collaboration with iShares being the latest rejected proposal.
Fidelity, a fellow asset management firm with approximately $4 trillion in assets under management, is also rumored to be filing for a Bitcoin ETF.
If either of the two options receives approval, it would provide an alternative for institutional or high net-worth clients who prefer not to engage in self-custody of their Bitcoin.
This alternative would serve as a substitute for the Greyscale Bitcoin Trust, which has recently traded below its net asset value.
Bitcoin Dominance Reaches 50% For The First Time Since May 2021
Altcoin seasons are often marked by a downtrend in Bitcoin dominance, or the ratio between the market capitalization of Bitcoin to the market cap of the entire cryptocurrency market.
Conversely, a strengthening Bitcoin Dominance often indicates that market participants are converting their assets into the blue-chip cryptocurrency, instead of speculating riskier tokens.
Currently, Bitcoin’s market capitalization of approximately $500 million is responsible for over half of the entire cryptocurrency market capitalization, including Ethereum, stablecoins, and the thousands of other tokens available.
Bitcoin continuing to reign supreme in Web3 combined with increased accumulation from even smaller entities has once again crowned it the king of crypto, despite talk of a “flippening” during the bull market.
As investors continue to place their faith in Bitcoin, we could see continued concentration into the blue-chip asset, and its dominance continue to climb higher over remainder of this bear market.
SEC’s Lawsuit Paints Uncertain Picture For Ethereum, Other Cryptocurrencies
While the recently released Hinman documents have shown that the SEC did not regard Ethereum as a security in 2018, the current lack of clarity regarding what is and is not a security has left both retail and institutions in a lurch.
Despite this, SEC chair Gary Gensler has remained steadfast in his view that Bitcoin should be classified as a commodity rather than a security.
Amidst the ongoing uncertainty surrounding the SEC’s decision on the regulatory classification of various cryptocurrencies, one thing remains evident: Bitcoin appears to be the most secure option for individuals seeking to avoid potential regulatory complications with the SEC.
As the SEC’s rulings regarding other cryptocurrencies remain in a state of limbo, Bitcoin stands out as a relatively safer choice, given SEC Chair Gary Gensler’s consistent stance that Bitcoin should be regarded as a commodity rather than a security.
By opting for Bitcoin, individuals can mitigate the risk of regulatory trouble and navigate the evolving landscape with greater confidence.
Despite the cryptocurrency market’s recent lackluster performance, it seems that positive news continue to pile on for Bitcoin.
As altcoins continue to bleed against Bitcoin, we are once again reminded why crypto veterans stress taking profits into and accumulating blue-chip cryptocurrencies during peak mania phases.
While it remains to be seen whether Bitcoin can finally break out of a multi-month downtrend, a continuous outpouring of relatively positive sentiment could be the key catalyst for the remainder of Q2 2023.
On the flipside, a breakdown or series of negative headlines could extend Bitcoin’s current decline. The possibility of the Blackrock ETF not being approved, for example, is something that undoubtedly weighs heavy in the minds of most still exposed to Web3.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief