Despite a global market downturn, Bitcoin (BTC) demonstrates unwavering resilience and reaches a peak not seen in over 19 months.
On Monday, the digital currency experienced a growth of 5.8%, propelling it to a value of $42,000. As Tuesday’s morning Asian trading commenced, the cryptocurrency maintained a steady stance slightly below this pinnacle.
Since the commencement of the week, global shares and bonds have faced significant challenges, leading to noticeable losses.
According to Sean Farrell, the head of digital-asset strategy at Fundstrat Global Advisors LLC, there is currently a significant disparity that emphasizes the lack of correlation between cryptocurrencies and other conventional macro assets, as reported by Bloomberg.
In 2023, Bitcoin experienced a significant increase in value by an impressive 152%. This surge was driven by unique factors within the cryptocurrency market, resulting in decreased correlations between Bitcoin, stocks, and gold.
One major reason for the rise in value can be the anticipation that the United States will endorse spot Bitcoin ETFs. This will create interest in the digital currency.
For the last 90 days, the correlation coefficient between Bitcoin and MSCI Inc.’s global shares index has fallen from 0.60 to 0.18 since the beginning of the year.
The correlation figure between the token and spot gold has significantly declined, almost reaching zero, as indicated by a comparable analysis.
When the correlation coefficient is equal to 1, it implies that assets are moving in sync, whereas a value of minus 1 indicates completely contrasting movements between them.
Regulation Impacts Crypto Market in the US
The crypto market, in its evolution, encountered the ever-pervading force known as regulation, an influential element that cannot be undermined.
There is a growing sentiment among industry leaders that the most challenging phase of the US crackdown on the sector has receded, resulting in a surge of optimism among executives.
The recent occurrences, like Sam Bankman-Fried’s incarceration due to fraudulent activities at FTX and the substantial penalties imposed on prominent cryptocurrency platform Binance along with its founder Changpeng Zhao for breaching US laws against money laundering and sanctions, have firmly established the notion that US authorities and regulators have openly conveyed their position.
The emergence of this development has brought about a surge of optimism regarding the potential for enhanced and productive communication between regulators and those involved in various industries.
Take notice of the fact that Bitcoin’s recent surge might have gone too far, as indicated by various technical measures such as the 14-day relative strength index (RSI). Currently sitting at 75, above the overbought threshold of 70, these indicators imply that caution may be needed.
markets potentially experiencing a downturn. Despite this, there is an ongoing curiosity from investors who speculate about the possibility of the Securities markets facing a decline.
Furthermore, the Federal Reserve’s inclination to decrease interest rates in the future has provided investors with optimistic outlooks, further fueling their motivation.
According to a filing made on Monday, Robinhood Markets, the online brokerage firm, disclosed that its trading volumes for cryptocurrencies in terms of value were about 75% more in November compared to October.
Similarly, public crypto corporations traded in the United States have observed a significant boost in their stock value as the price of BTC continues to skyrocket.
At the onset of the week, the widely-used cryptocurrency exchange, Coinbase, experienced a considerable upswing of 7.3% just moments before the commencement of market activities.
Despite the decrease in trading volumes during the third quarter, the stock witnessed an astonishing surge of almost 62% throughout November.
Microstrategy, a leading player in the bitcoin investment arena, celebrated an impressive 8.2% uptick while successfully securing a staggering $593 million worth of bitcoins just last month.
Frequently Asked Questions:
1. What stands out as the focal point of the article?
Elucidating the extraordinary ascent of Bitcoin, the article highlights how it reached its highest level in 19 months during a period of global economic decline. It underscores the cryptocurrency’s notable distinction from conventional assets, presenting its low correlation with them.
2. What is the current position of Bitcoin after its climb? Can you provide information about how much it has risen?
Bitcoin experienced a notable surge of 5.8%, propelling its value to $42,000, and during the early hours of Asian trading on Tuesday, it successfully held onto its position just below this mark.
3. What is the reason for the article highlighting the minimal connection between cryptocurrencies and conventional macro assets?
Sean Farrell, the digital-asset strategy leader at Fundstrat Global Advisors LLC, emphasizes how Bitcoin’s resilience during the global market downturn highlights the notable disparity between cryptocurrencies and conventional assets.
4. What were the main factors that contributed to the impressive growth of Bitcoin throughout 2023?
However, two key factors have contributed to Bitcoin’s recent spike. In the first place, the approval of the first spot Bitcoin exchange-traded funds (ETFs) has been highly anticipated in the US. This has pushed up the cost of the digital coin. Another thing that has led to Bitcoin’s rise is the fact that it has moved away from conventional assets like stocks and gold. This reduced correlation has increased the appeal of Bitcoin as a unique investment option, attracting more individuals to jump on the bandwagon.
5. How has the crypto market in the United States been affected by regulatory measures?
Executives operating in the industry hold a positive outlook as they believe that the most challenging period of the U.S. crackdown on the sector is now in the past. This newfound optimism has sparked expectations for enhanced and fruitful discussions between regulators and industry players.
6. Is there a technical indicator that indicates Bitcoin’s rally might be excessively extended?
Bitcoin’s recent surge could be experiencing fatigue as the 14-day relative strength index (RSI) stands at 75, surpassing the overbought threshold of 70.
7. Which occurrences have shaped the positive outlook on regulation within the cryptocurrency market?
There is a growing sense of hope for regulatory clarity due to a series of recent occurrences, such as the incarceration of Sam Bankman-Fried, the imposition of penalties on Binance, and what appears to be a clear expression of regulatory stance.
8. How do experts foresee the future of U.S. spot Bitcoin ETFs and the potential impact of interest-rate cuts executed by the Federal Reserve?
Market reaching new all-time highs shortly. Experts anticipate continued enthusiasm from potential investors who are drawn to the promising prospects of the Securities Market’s predicted growth.
9. In light of Bitcoin’s exponential growth, what has been the performance of online brokerage Robinhood, as well as crypto companies Coinbase and Microstrategy?
A9: Robinhood observed a significant rise of 75% in the trading volumes of cryptocurrencies, whereas both Coinbase and Microstrategy saw their stock prices soar, even though their financial performances differed.
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