Inflation Uncertainty Keeps Bitcoin Near A Six-Month High
Despite some global inflation worries, bitcoin remained near a six-month high early on Monday amid optimism that U.S financial regulators will soon approve crypto ETFs.
Concerns over inflation also fueled demand for bitcoin, which has a limited supply compared with the ample number of currencies issued by central banks, which were printed to stimulate economies.
Data provided by blockchain analytics firm CryptoQuant recently revealed that Bitcoin reserves held across all crypto exchanges fell to their lowest levels in a year. These suggest Crypto traders exhibited their intention to hold their bitcoin tokens close rather than exchange them for other fiat or digital assets with this decline.
The Securities and Exchange Commission (SEC) decision at the world’s largest economy to permit the first bitcoin futures ETF to begin trading this week is expected to spur broader investment in digital assets.
In the coming months, cryptocurrency players expect the approval of the first U.S. bitcoin ETF to trigger an influx of money from institutional investors who cannot currently invest in Bitcoin.
Inflation worries also sparked interest in the pioneer crypto which are limited compared to the ample amount of currency issued by central banks in recent years to stimulate their economies.
Last week, Bitcoin reached $62.3k, so close to Friday’s six-month high of $62,944 but still short of its all-time high of $64,8k reached in April.
In the past, the SEC has questioned whether funds possess the necessary information to value cryptocurrencies or other related products. Additionally, there have been questions about the validity of ownership of coins held by funds, as well as the threat of hackers.
Gensler’s appointment as head of the agency was welcomed by many crypto advocates. As they noted, he once taught a class at MIT’s Sloan School of Management called “Blockchain and Money.” However, he has also in recent months described the space as the “Wild West” and offered his support for more comprehensive regulation.
Although Dallas Mavericks owner Mark Cuban has voiced his opposition to investing in bitcoin-based exchange-traded funds (ETFs), one of which could begin trading next week in the U.S. The Shark Tank star says that he preferred to purchase bitcoin directly.