Is This the Rally to $100k for Bitcoin?
This week the price of Bitcoin hit a new 52-week high as it briefly touched above $31,000. Bitcoin has already gained more than 16% over the past seven days and has carried the global crypto market cap back to nearly $1.2 trillion. So what is all the hype about and should we be excited?
Does anyone else find it ironic that traditional financial institutions could be the ones that are finally sending Bitcoin higher? For years, Bitcoin maximalists shunned TradFi companies and worshipped at the altar of Bitcoin. Now, it seems like it is going to be institutional adoption that finally sends Bitcoin back toward its all-time high prices.
Last week, the world’s largest ETF provider Blackrock (NYSE: BLK) applied to the SEC for a spot Bitcoin ETF. The SEC has previously denied these applications from companies like VanEck and Grayscale, but Blackrock is a different beast. Blackrock’s iShares ETFs alone have over $2.5 trillion in assets under management around the world. Not only that but the company is known to have very strong financial and political sway in the United States. It seems like the SEC is pinned between a rock and a hard place after filing lawsuits against Binance and Coinbase (NASDAQ: COIN) a couple of weeks ago.
Is it Time to Invest in Crypto Stocks?
Who knows how high or how long this Bitcoin rally will go? It has traded within range but has failed to truly breakout into the upside until this week when it finally made a new 52-week high. Even that was quickly erased and could continue to be an area of resistance for Bitcoin. Shares of Coinbase (NASDAQ: COIN) rallied by more than 10% after a brief sell-off following the SEC lawsuit.
Is it time to buy these crypto stocks again? Coinbase certainly has some legal troubles ahead of it but the path to crypto dominance in the United States is becoming clearer. The stock is already up by nearly 85% in 2023 so we might want to wait for a pullback first. Still, there aren’t many pure crypto plays on the stock market aside from Bitcoin miners.
Do I think the application from Blackrock will be approved? This is an interesting situation that the SEC is in. If it approves Blackrock but not other institutions, it sends a dangerous message that Blackrock is above the US government. If it grants all of these applications then we could see an epic squeeze for Bitcoin, potentially back through all-time highs. This is what is so exciting about this situation. With the amount of capital that these institutions have to buy Bitcoin to hold for their ETFs, we could truly see the first supply shock for Bitcoin. With the halvening approaching next year and the potential for these Bitcoin ETFs to be approved, it could be an exciting way to finally break out of this crypto winter.
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