Bitcoin About saw a significant rise on Friday, setting the stage for its second consecutive gain. The cryptocurrency is on the verge of breaking the $70,000 mark again, driven by strong risk appetite in the market and favorable economic indicators.
Market Performance
Bitcoin Price Movement
Bitcoin climbed by 1%, or $680, at Bitstamp, reaching $69,010, with a session low of $67,865. This follows a 1.1% increase on Thursday, marking the first profit in three sessions as US treasury yields declined.
Overall Cryptocurrency Market
The total market value of cryptocurrencies increased by over $10 billion, reaching $2.690 trillion, as both Bitcoin and Ethereum saw gains. This rise reflects a broader positive sentiment in the cryptocurrency market.
Factors Influencing Bitcoin’s Rise
Declining US Treasury Yields
US 10-year treasury yields fell by 1%, marking the second consecutive losing session, retreating from four-week highs at 4.638%. This decline in yields has improved risk sentiment in the market, encouraging investors to move towards higher-risk assets like cryptocurrencies.
US Personal Spending Data
Recent US personal spending data for April matched forecasts, suggesting slower inflationary pressures. This data has improved market sentiment by potentially increasing the likelihood of multiple Federal Reserve interest rate cuts this year. According to the Fedwatch tool, the odds of a 0.25% rate cut in September rose to 53%, with the likelihood of a similar cut in November increasing to 66%.
Monthly Performance
Bitcoin is up 14% so far in May, on track to achieve its fourth monthly profit this year. This positive trend has been supported by a steady influx of cash into US bitcoin exchange funds throughout May.
Approval of Ethereum Exchange Traded Funds
Last week, the SEC approved several Ethereum exchange-traded funds, including those managed by Blackrock. This approval has boosted market sentiment, contributing to the overall rise in cryptocurrency prices.
Bitcoin Exchange Funds
Since May 13, bitcoin exchange funds have experienced a continuous positive cash flow as institutional investors show increasing interest. The renowned Blackrock fund has become the world’s largest bitcoin exchange fund, holding bitcoin assets worth $19.48 billion.
Conclusion
Bitcoin’s resurgence towards the $70,000 mark is driven by a combination of declining US treasury yields, favorable US economic data, and increased institutional interest. As the market continues to show strong risk appetite, Bitcoin’s upward trajectory seems poised to continue.
FAQs
Why is Bitcoin rising towards $70,000? Bitcoin is rising due to a decline in US treasury yields, favorable US personal spending data, and increased institutional interest in cryptocurrency exchange funds.
What impact does US treasury yield have on Bitcoin? A decline in US treasury yields improves risk sentiment, encouraging investors to move towards higher-risk assets like Bitcoin, thereby boosting its price.
How has the SEC’s approval of Ethereum ETFs affected the market? The SEC’s approval of Ethereum exchange-traded funds has boosted market sentiment, contributing to the overall rise in cryptocurrency prices.
What is the current market value of cryptocurrencies? The total market value of cryptocurrencies has risen to $2.690 trillion, reflecting gains in both Bitcoin and Ethereum.
What are the expectations for Federal Reserve interest rate cuts? Following recent data, the odds of a 0.25% Federal Reserve interest rate cut in September have risen to 53%, with a 66% likelihood of a similar cut in November.