The largest cryptocurrency by market capitalization, Bitcoin (BTC), witnessed a significant surge above $28,000 on Tuesday afternoon, marking the largest short squeeze this month. This remarkable uptick took place within hours, despite BTC trading flat around $26,800 for most of the day, according to CoinDesk Indices data. Subsequently, it pared some gains, dropping to approximately $27,900, but remains up 5.2% over the past 24 hours, outperforming most other digital assets.
The price hike left traders who were positioned for a drop reeling, with $36.6 million in liquidations over the past 24 hours, as reported by CoinGlass data. This massive amount marked the largest short liquidations since May 28. Interestingly, this surge coincides with announcements of major crypto initiatives from large financial services institutions, which have brightened the mood, previously dampened by increasing U.S. regulatory pressure including lawsuits against crypto exchanges such as Binance and Coinbase.
In a recent development, banking giant Deutsche Bank applied for a digital asset custody license in Germany. Additionally, crypto exchange EDX Markets, which secured funding from financial powerhouses like Charles Schwab (SCHW), Citadel Securities, and Fidelity Digital Assets, started offering trading with BTC and ether (ETH) on the same day. Furthermore, investment management giant BlackRock (BLK) surprised markets last week by filing for a spot BTC exchange-traded fund (ETF).
Brent Xu, CEO and co-founder of decentralized finance (DeFi) bond market platform Umee, believes that the Bitcoin rally is indeed correlated with the news of larger traditional financial institutions seeking significant exposure to the digital asset ecosystem. He said, “It’s clear that BlackRock, Fidelity, and the others have client bases that want to invest in BTC and other crypto assets by way of ETFs and other more traditional investment vehicles.”
Xu explains that this news has softened the relatively bleak regulatory environment in the United States and indicates that these major players are eager for a more clear and fair regulatory environment than the current one. As the largest cryptocurrency by market capitalization, Bitcoin’s performance will continue to impact the industry, providing valuable insight into the ongoing debate around digital assets. With giants like Deutsche Bank, BlackRock, and Fidelity driving the adoption of cryptocurrencies, the crypto community can expect more advancements in the market and a notable push towards acceptance in the mainstream financial world.
Source: Coindesk
