Deep Tide TechFlow news, on November 19, according to Bitcoin.com, this week, cryptocurrency has become the focus, outperforming traditional assets. Bitwise Europe's report attributes this rise to growing optimism regarding U.S. policy measures and ongoing Bitcoin supply constraints.
The core of the report discusses the possibility of the U.S. establishing a strategic Bitcoin reserve. Pennsylvania has already enacted legislation supporting such reserves, raising speculation that other states may soon follow suit. Betting activity on Polymarket amplified this expectation, with the predicted probability of establishing a national Bitcoin reserve soaring to over 50% last week.
The report also delves into Bitcoin's supply constraints, while demand from ETFs and companies continues to grow. Inflows to U.S. spot Bitcoin ETFs have surged, outpacing the overall supply growth of Bitcoin, leading to an imbalance between supply and demand. This shortage is reflected in Bitcoin's liquidity and high liquidity supply indices, both of which have dropped to historical lows.
Companies are increasingly accepting Bitcoin as a reserve asset, with firms like Microstrategy making significant purchases of Bitcoin, reinforcing this trend.
Researchers further explain that Bitcoin is not the only cryptocurrency benefiting from a more transparent regulatory environment in the U.S. Altcoins, including XRP, and meme coins like DOGE have also made progress. The Government Efficiency Department has taken a crypto-friendly stance, adding momentum to these assets (particularly for DOGE).
However, Ethereum has not kept pace. This lag may be related to capital flows favoring other cryptocurrencies. On a broader economic front, U.S. CPI data for October was in line with expectations. Coupled with other indicators, this strengthened expectations of a potential rate cut by the Federal Reserve in December, introducing another variable to the evolving cryptocurrency narrative.
