Despite a 16% pullback in Bitcoin’s (BTC) price since hitting a high of $31,000 two months ago, the top cryptocurrency by market value is still up nearly 60% year-to-date, a stellar performance compared to Nasdaq’s 38% rise. The path of least resistance may be on the higher side, thanks to macroeconomic developments and other bullish tailwinds. “Any decline in the dollar is good for Bitcoin (and vice versa),” noted crypto intelligence firm Jarvis Labs.
The Federal Reserve (Fed) kept rates steady between 5% and 5.25% last week, pausing the 15-month rate hike cycle that pushed the dollar higher and roiled risk assets last year. The central bank left the door open for continued rate hikes over the coming months, but analysts are not sure it will walk the talk. “The reason that I don’t think there will be more rate hikes is that inflation is responding,” said Noelle Acheson, the author of the popular Crypto Is Macro Now newsletter.
The U.S. Treasury (bond market) volatility is declining fast, which often leads to increased risk-taking in financial markets. BlackRock (BLK), the world’s largest asset manager, filed for a spot-based Bitcoin exchange-traded fund (ETF) last week, offering a positive surprise to the market. Per CF Benchmark’s author Ken Odeluga, the proposed fund shows institutional appetite for Bitcoin-based products remains strong.
The U.S. Securities and Exchange (SEC) has rejected several applications for spot ETF, citing concerns about Bitcoin price manipulation. BlackRock might succeed as the application includes a surveillance-sharing agreement, which could eliminate the risk of market manipulation.
Bitcoin’s dominance rate has broken out of a three-year oscillation pattern in a sign of investors rotating money out of altcoins and into Bitcoin. Pseudonymous analyst The DeFi Investor voiced a similar opinion on Twitter saying, Bitcoin may continue to outperform altcoins, given the breakout in the dominance rate.