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Bitcoin sees glimmer of hope amidst downbeat week

TL;DR

  • BlackRock’s unexpected filing for a Bitcoin ETF provides a glimmer of hope during a challenging week for the king crypto.
  • The introduction of institutional money into crypto could unlock new use-cases, potentially uplifting the value of Bitcoin.
  • The crypto’s downward trend is amplified by recession-like concerns and the absence of new buyers.

Amid a taxing week of disappointments, Bitcoin, the prominent cryptocurrency, began to shimmer with a glimmer of hope.

The downbeat trend seemed to break after the world’s largest asset manager, BlackRock, filed for a spot Bitcoin ETF, sending a wave of optimism through the crypto world.

This initiative by BlackRock sparked a much-needed morale boost for a sector that has been under the regulatory scrutiny of the Securities and Exchange Commission (SEC).

Unexpected move lights up the market

The cryptocurrency king, Bitcoin, concluded the week with a slight dip of 0.21% at a value of $26,355.04. Measured from one Friday’s stock market closure at 4:00 p.m. ET to the next, this marked BTC’s second consecutive week of declining returns.

The news about BlackRock’s intent to file a spot Bitcoin ETF brought a ray of hope to the market, with traders and investors interpreting it as a positive sign for the industry.

The initial response was somewhat reserved. After all, Coinbase, the proposed crypto custodian for BlackRock’s Bitcoin ETF, had found itself on the wrong side of the SEC just a week ago. However, Friday seemed to dawn brighter, with a growing sense of optimism pervading the market.

Gustavo Schwenkler, associate professor at the Leavey School of Business at Santa Clara University, highlighted that crypto prices are largely driven by the anticipated future uses of the technology.

The introduction of institutional money to crypto, enabled by entities like BlackRock, could potentially unlock new uses for the digital currency that are currently inaccessible.

Approval of BlackRock’s filing could alter the perception of crypto, potentially having a far-reaching impact on how B TC and other cryptocurrencies are valued. This optimistic perspective fueled the rise of about 4% on Friday, a refreshing turnaround from a rather lackluster week.

Challenges looming large

The week didn’t start as brightly. Bitcoin, burdened with a multitude of challenges, stumbled to a March low midweek. According to Mark Connors, head of research at 3iQ, the fear of missing out (FOMO) has evaporated from the market.

While Bitcoin dominance has emerged after the departure of the so-called ‘tourists,’ the path ahead remains challenging.

Recession-type concerns are resurfacing, evident from macroeconomic and rates data. BTC appears to be in a holding pattern, with core holders and exchanges witnessing low volumes, indicating a lack of new buyers.

The fallout from the SEC’s lawsuits against Coinbase and Binance last week continues to be a thorn in the side of investors. Bitcoin’s value tumbled below the $25,000 mark for the first time since March following the Federal Reserve’s June meeting.

Japanese Bitcoin exchange Bitbank’s crypto market analyst, Yuya Hasegawa, suggests that recent declines may also be related to the miners’ dilemma.

A surge in Bitcoin transfers from miners’ wallets to exchange wallets was seen at the end of the week, a trend not observed since October 2021.

This indicates that miners’ profitability might be dwindling due to falling Bitcoin prices and increasing mining difficulty. As a result, they’re gradually shedding their Bitcoin holdings, which in turn, could be putting a cap on BTC’s potential for growth.

While Bitcoin did manage to find a spark of hope amidst a tumultuous week, its future trajectory is likely to be shaped by the interplay of institutional investments, regulatory interventions, and mining activity.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Jai Hamid

Jai Hamid is a passionate writer with a keen interest in blockchain technology, the global economy, and literature. She dedicates most of her time to exploring the transformative potential of crypto and the dynamics of worldwide economic trends.

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