Macroeconomic factors drive Bitcoin up, analyst: Bitcoin unlikely to fall below $32,000
In the latest market report from venture capital firm QCP here, analysts pointed out that the recent rise in Bitcoin price was not primarily driven by expectations of the approval of a spot Bitcoin ETF, but rather significantly influenced by macroeconomic factors, including estimates of supply from the U.S. Treasury Department and market expectations of the Federal Reserve potentially ending its monetary tightening actions. Similar view: Bitcoin surge not due to spot ETF, but related to U.S. bonds.
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Reasons for Bitcoin's Rise Unrelated to ETF Expectations
Recently, the cryptocurrency market has witnessed a steady increase in Bitcoin prices. Analysts at QCP noted in their market update report that this trend appears to be primarily driven by macroeconomic forces and has less to do with market expectations for a Bitcoin ETF. The report mentioned that the U.S. Treasury's first-quarter supply estimate was lower than expected, coupled with market expectations for the dovish stance of the Federal Open Market Committee (FOMC), leading to a decrease in bond yields, further stimulating the value of risk assets.
Will Bitcoin Struggle to Fall Below 32K?
QCP analysts are cautious about whether a new round of global stock and bond rally will begin, but they are optimistic about the outlook for the digital asset market, believing that unless new regulatory pressures emerge, the price of Bitcoin is unlikely to fall below $32,000.
According to a report by The Block, Max Shannon of CoinShares Research believes that part of the recent momentum in Bitcoin comes from pessimistic U.S. wage data, leading investors to view Bitcoin as a hedge. Shannon also noted that the recent pause in rate hikes by the Federal Reserve and its less hawkish comments suggest that rates may have peaked, thus supporting risk assets.
The Bitcoin ETF Promotion Argument
However, according to Matthew Graham, a partner at Ryze Labs, market expectations for a Bitcoin ETF are still seen as a significant factor driving the rise in Bitcoin prices.
He emphasized that many traditional financial institutions support this view. In addition, Ruslan Lienkha, Chief Market Officer at YouHodler, mentioned that investors seem to be following the "buy the rumor, sell the fact" investment pattern.
In the backdrop of increasing market confidence, Michael Dunn, President of Bitnomial Exchange, pointed out that open interest in the futures and options markets has reached historic highs, and market volatility has dropped to its lowest, indicating that the market may be gearing up for further gains.