According to CoinMarketCap, Bitcoin (BTC) has risen nearly 5% in the past 24 hours, breaking through the all-important $65,000 level. Moreover, the reasons for the recent surge are multi-layered, with many macroeconomic factors at play. In fact, major cryptocurrencies are benefiting from a perfect storm of data and speculation.
This spike coincides with the release of US inflation statistics. Specifically, the CPI shows that U.S. core inflation has fallen to 3.4%, a three-year low. Since then, the Bitcoin investment market has seen increased participation from the world's largest banks.
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BTC reaches $65,000 as inflation falls
The digital asset market has long been led by Bitcoin and continues to rely on its performance. Since the much-anticipated Bitcoin halving event took place in April, the market has recorded a slight decline compared to the beginning of the year. However, the situation appears to be improving due to the recent surge in assets.
In fact, Bitcoin (BTC) has seen a rise in assets over the past 24 hours, reaching the $65,000 level. Much of this momentum has to do with the inflation data released on Wednesday. Specifically, the US inflation rate was shown to be declining.
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This development remains important for its impact on US interest rate cuts. The Fed is asking for a wait-and-see approach, although it has assured that such rate cuts will occur in 2024.
The cooperation of inflation data increases the likelihood that those things will happen sooner rather than later. But there remain concerns about the speed of the decline in inflation, which could prevent multiple rate cuts this year.
Inflation is a factor in Bitcoin's surge this week, but it's not the whole story. Alternatively, the spot Bitcoin ETF market appears to be catapulting the asset to recent levels.
Will Bitcoin ETF cause price hike?
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BTC soared today due to increased reports of Bitcoin ETF exposure. In fact, many financial institutions have emerged that hold large amounts of Bitcoin investment products. Those U.S. Securities and Exchange Commission (SEC) filings subsequently led to a significant increase in the value of the asset this week.
The list of banks that have recently disclosed their Bitcoin ETF exposure includes JPMorgan and Wells Fargo, the No. 1 and No. 3 U.S. banks, respectively.
The list continued to grow as Switzerland's largest bank, UBS, and Bank of Montreal, one of Canada's Big 5, also disclosed holdings in Bitcoin ETFs.
Additionally, groups like the Wisconsin Investment Commission have launched $99 million worth of BlackRock's Spot Bitcoin ETF. These developments have increased the overall value of the influx of institutional investor interest.
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However, the impact on the ETF market does not end there, and expectations remain for financial institutions that may still enter the market. Specifically, Vanguard announced that it will hire Salim Ramzi, BlackRock's former head of global ETFs, as its new CEO.
The investment management company banned all Bitcoin spot ETFs in January. However, Ramji's presence has many investors speculating a shift away from the company.
If they enter the Bitcoin ETF market, we will see another reliable and well-known company enter the market. Thereafter, the trend that drives price appreciation should continue as more institutional investors introduce Bitcoin exposure into their portfolios.
