Bitcoin (BTC) price rose today, reaching a 2023 high of $31,431. The year-to-date highs for bitcoin come amid recent growing institutional interest in bitcoin from firms such as BlackRock and Fidelity Investments, both of which have filed for spot bitcoin ETFs in the past two weeks.
Institutional interest seems to have negated the negative news of the SEC cracking down on Binance and Coinbase, with bullish traders continuing to overwhelm BTC bears.
This is why the price of Bitcoin is rising today.
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Institutional Interest Sparks Bitcoin Rally
Bitcoin prices started to rise after BlackRock filed for a spot BTC ETF in the US on June 15. While BlackRock is not the first firm to apply to the SEC for a bitcoin ETF, they are by far the largest of all applicants.
So far, the SEC has refused to approve a spot bitcoin ETF despite numerous applicants including Cathie Wood’s ARK and 21Shares applying for approval three times. Another firm that was rejected for a bitcoin ETF application was Grayscale. After being dismissed, the company took the SEC to the appeals court to defend the soundness of bitcoin futures.
BlackRock is the world’s largest asset manager, managing more than $8.5 trillion in assets. According to a filing with the company, the company will also leverage BTC held in a Coinbase Custody Trust SEC.
The filing also boosted the Grayscale ETF, with discounts near 2023 highs below 35%.
In addition to Valkyrie’s application for BTC spot ETF and Bitcoin mining machine ETF, another financial services giant, Deutsche Bank, also applied for a digital asset custody license in Germany.
Liquidations Could Push Bitcoin Price Higher
In the first half of June 2023, the liquidation rate of short positions was lower than that of long positions. The BlackRock ETF filed an announcement on June 15 and has liquidated more than $220 million in short positions since that date, shifting the wealth of short sellers. Over $31 million in BTC shorts were liquidated in the past 24 hours alone.
This group of investors appears to be doubling down despite the streak of losses from short sellers. On June 23, 53% of options were biased towards bears, which could create an opportunity for a short squeeze and a bigger rise in the price of Bitcoin.
Cooling dollar index could benefit bitcoin price
Another positive sign for the price of Bitcoin is the cooling of the U.S. dollar index (DXY). Historically, when the DXY index pulls back, confidence in risky assets like Bitcoin increases.
The dollar could continue to cool as the Federal Reserve paused interest rate hikes last week and some market participants believe the U.S. economy may grow. If that happens, Bitcoin could continue to rise along with the stock market. The better the macro environment, the better the Bitcoin price.
Typically, there is a strong correlation between Bitcoin and stock indexes such as the S&P 500. Stocks rallied sharply after the Federal Reserve paused interest rate hikes on June 14, while bitcoin prices retreated. It now appears that the current bitcoin rally is allowing the bitcoin price to catch up.
Some market participants believe that the U.S. economy may grow and the dollar may continue to cool. If that happens, Bitcoin could continue to rise along with the stock market.
related: Bitcoin ‘parabolic rise’ means BTC price hits all-time high in 2023 – Trader
While bitcoin prices are showing some bullish momentum in the short-term after the BlackRock news and the dollar cooling off, the bitcoin fear and greed index has reached a three-month high.
This article does not contain investment advice or recommendations. Every investment and transaction involves risk, and readers should do their own research when making a decision.
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