Bitcoin, the leader in the cryptocurrency market, has surged nearly 5% in the last 24 hours, surpassing the $66,000 threshold.
This increase comes amid several complex economic indicators suggesting a mix of speculation and tangible data driving the price up.
Economic indicators push Bitcoin over $65k
Recent data from the U.S. have shown a decrease in core inflation rates, hitting a three-year low at 3.4%. This drop in inflation figures coincided with an upsurge in interest from major global banks in the Bitcoin investment scene.
The Consumer Price Index (CPI) update released this Wednesday has sparked a flurry of activity, suggesting a correlated influence on Bitcoin’s latest price movements.
As inflation dips, the potential for interest rate cuts is high, although with a cautious approach from the Federal Reserve which prefers a “wait-and-see” strategy.
Nonetheless, the market anticipates these cuts could be expedited, though the pace of inflation’s decline casts doubts on multiple reductions happening within this year.
This isn’t the only factor pumping Bitcoin’s value. The spotlight is also shining brightly on the Spot Bitcoin ETF market, which has been a significant catalyst in the cryptocurrency’s recent rally.
Reports of increased Bitcoin ETF exposure have been important. This week alone, several leading financial institutions, including giants like JPMorgan and Wells Fargo, revealed huge investments in Bitcoin-related offerings, per SEC filings.
This trend continued with disclosures from other major players such as UBS and Bank of Montreal, alongside an impressive $99 million investment in BlackRock’s Spot Bitcoin ETF by the State of Wisconsin Investment Board.
Institutional Momentum Fuels Rally
The situation in the Bitcoin ETF market is further amplified by the strategic moves within major investment firms.
Vanguard, a notable name in the sector, recently shook the market by appointing Salim Ramji, a former BlackRock exec, as its CEO, sparking speculation about a possible change towards embracing Bitcoin ETFs, despite a previous ban.
This change could signal a broader acceptance and integration of Bitcoin within traditional investment portfolios, potentially driving the price further up.
In the background of these developments, trading platforms and financial analysts closely monitor other economic indicators such as the Producer Price Index (PPI), which has shown a consecutive increase over the past months.
Despite these increases, the Fed remains cautious, with Federal Reserve Chair Jerome Powell labeling the recent data as “mixed.”
This perspective is reflected in the market odds, which show a lukewarm expectation for immediate rate cuts, with only a modest probability assigned for cuts in the coming months, according to the FedWatch Tool by CME Group.