Bitcoin, the global cryptocurrency leader, rode this wave to close the week at $30,864.67, marking an impressive 17.1% surge, according to Coin Metrics data.
This spike represents the best performance for the renowned digital currency since March 17, with an unprecedented peak of $31,412.72 reached on Friday.
Altcoins rise amid regulatory scrutiny
In the diverse universe of cryptocurrencies, Bitcoin wasn’t the only star. Tokens associated with Solana and Cardano experienced an approximate 12% climb during the week. Polygon, another contender, saw its value increase by over 13%.
This positive performance came in the face of intense pressure brought on by the U.S. Securities and Exchange Commission, which recently classified them as crypto asset securities in lawsuits against top exchanges, Binance and Coinbase.
This promising week for cryptocurrencies coincided with a downturn in the conventional market. Major averages recorded their lowest weekly performance since March, with the Nasdaq Composite and the S&P 500 both declining on three out of four trading days.
Traditional finance moves Bitcoin beyond $30k
Bitcoin’s impressive soar over the $30k mark is largely attributed to a response from traditional finance or ‘TradFi’ institutions to BlackRock’s recent filing for spot bitcoin exchange traded funds (ETFs).
BlackRock’s application, submitted on June 15, triggered a stream of similar filings from other asset managers, with industry giants like WisdomTree and Invesco joining the race in the past week.
Other noteworthy institutional activities include the launch of institutional-exclusive crypto exchange, EDX Markets. This new platform, supported by Fidelity Digital Assets, Charles Schwab, and Citadel Securities, now facilitates trading of Bitcoin and Ether.
In addition, JPMorgan confirmed that it has begun processing euro-denominated payments for corporate clients using its proprietary JPM Coin.
Outlook: A bright yet cautionary forecast
While Bitcoin’s year-to-date gains hover around 85% with a nearly 8% advance for the quarter, the low trading volume since the end of the year’s banking crisis remains a concern.
Despite the recent positive trend, Bitcoin’s trading volume has seen a meager increase of 0.5% on a week-over-week basis, per JPMorgan data.
This negligible growth in trading volume may signify that Bitcoin is yet to draw new investors or capital into the crypto market, according to Owen Lau, an analyst at Oppenheimer.
With much of the good news already reflected in this week’s price, a minor pullback in the week ahead wouldn’t be a surprise. According to Lau, investors “may just sell the strength and wait for the next catalyst.”
From a technical perspective, Bitcoin’s recent escape from the two-month long descending channel is promising. However, Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank, warns that a sustained cash influx might not be likely in the macro view.
He suggested that while Bitcoin could witness another leg up to around $32,000 in the short term due to technical reasons, the current recovery might not last long.