Bitcoin: What you should watch out for after BTC’s ATH

• Bitcoin recorded a new all-time high (ATH) weeks before the halving.
• Exec attributed the growth to Bitcoin ETFs.

The wait is finally over! Bitcoin [BTC] has shattered records by soaring to a new ATH of over $72,000. This breakthrough comes alongside pivotal regulatory advancements. The UK Financial Conduct Authority (FCA) has expressed its willingness to welcome crypto-backed exchange-traded notes (ETNs) aimed at institutional investors. 

Moreover, the London Stock Exchange announced it will begin accepting applications for Bitcoin and Ethereum [ETH] ETNs in the second quarter of this year.

Zach Pandl, the Managing Director of Research at Grayscale Investments, shed light on how these developments can fuel BTC’s demand. Speaking to Fox Business, he commented: 

“We are seeing a continued maturing of the asset class….that started with the ETFs here in the US market; we’re seeing other jurisdictions offer a broader range of products to investors that’s something I think can continue over time continue to drive demand for Bitcoin.”

How sustainable is the current bull market?

The exec accredited Bitcoin’s exceptional performance to the increased demand for new spot Bitcoin ETFs, which have attracted about $10 billion in investments since their inception in early January.

He highlighted the market’s cyclical nature, emphasizing the current momentum that suggests we are in a bull market phase. Consequently, Pandl anticipated the possibility of continued price increases.

Given Bitcoin’s status as a macro asset, Pandl advised investors to pay close attention to inflation and Federal Reserve policy. These factors are crucial for evaluating the sustainability of the current bull market in Bitcoin.

JPMorgan CEO’s advice to the Fed

Meanwhile, JPMorgan CEO Jamie Dimon, a vocal Bitcoin skeptic, advised the Federal Reserve to postpone interest rate cuts beyond June to bolster its inflation-fighting credibility.

During a livestream at the Australian Financial Review business summit from New York, Dimon emphasized the importance of being data-dependent, suggesting the Fed could always implement rapid and significant cuts later. He stated, 

 “Their credibility is a little bit at stake here. I would even wait past June and let it all sort it out.” 

Currently, markets anticipate an 84% chance of a Fed rate cut in June, with expectations of a total easing of 90 basis points over the year.

Bitcoin bulls should watch out for the upcoming elections

When asked about the importance of the upcoming US elections with regard to cryptocurrency, Pandl pointed out that many discussions in the current Congress regarding cryptocurrency have been bipartisan.

He suggested the possibility of progress in legislation, such as stablecoin regulation, regardless of the election’s outcome.

The exec noted, 

“Bitcoin competes with the US dollar and physical gold, so we should be looking at things like the amount of deficit spending that’s expected, how much debt growth we can expect in the US, what are the risks of inflation.” 

Such macroeconomic indicators can drive demand for Bitcoin and other cryptocurrencies beyond the direct effects of targeted legislative changes.