The crypto market is experiencing a surge, and Bitcoin has broken above the $30,000 mark. This rise is not a random occurrence but a result of strategic moves in the financial sector. Here’s why.
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Traditional Finance’s Push into Crypto
Traditional finance institutions are making significant strides into the crypto space. This move is evident in the series of higher lows and higher highs Bitcoin has been experiencing since the FTX collapse at the end of 2022. While regulators were warning retail investors about the risks of crypto, traditional finance was quietly taking positions in the market.
This strategy is not new; it’s an old trick used when one wants to buy a lot of something – you undervalue it, cause a price collapse, and then swoop in to buy a whole bunch.
Fidelity, Citadel, and Charles Schwab have launched their own crypto exchange called EDX. This move is a significant green flag for institutional players. EDX distinguishes itself from other exchanges like FTX and Binance by not taking custody. They simply match buyers and sellers and handle price, a model closer to traditional exchanges. This development is key, given the fear, uncertainty, and doubt in the asset class.
There are credible rumors that Fidelity is preparing something seismic in the crypto space. Abby Johnson, who has been mining Bitcoin since 2014, is leading this move. This development is another reason for the increase in Bitcoin’s value.
BlackRock’s ETF Application
BlackRock’s filing of an ETF application is another significant development. They have a track record of getting approvals, and it would be unusual for them to file something just to get rejected. Either they know something, or they want to make a point in getting rejected.
When retail investors miss an investment opportunity, it’s usually gone. But when traditional finance misses the boat, they pull it back. This scenario is what’s happening with Bitcoin. Traditional finance institutions are not necessarily saying they believe in crypto, but they acknowledge there’s a market out there, and they want to own that market.
Fed Chair’s Acknowledgement
Fed Chair Jerome Powell has acknowledged that crypto appears to have staying power as an asset class. He also spoke on stable coins, seeing them as a form of money. He believes that it would be appropriate to have a robust Federal role in what happens with stable coins going forward.
In conclusion, the rise in the crypto market is a result of strategic moves by traditional finance institutions, regulatory developments, and the recognition of crypto’s staying power. As these developments unfold, the crypto market continues to surge, proving its resilience and potential for growth.
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