In the afterglow of a rather surprising tumble in the June Consumer Price Index (CPI), Bitcoin initially appeared ready to break free from its tormenting limitations of the past month. However, despite the promising inflation data, the world’s largest cryptocurrency retraced its steps back into the longstanding shadows resting below the $31,000 mark.
Former Chair of the Commodity Futures Trading Commission (CFTC), Tim Massad, suggestively places the crypto commodity vs security identification conundrum on hold. He reasons that the creation of basic market and investor protection standards through a self-regulatory organization is feasible before the actual status of digital assets is determined. Admittedly, he does not discard the importance of the issue but proposes an incremental approach towards resolving it.
Bitcoin’s morning glimmer faded as news of two wallets associated with the US government, moving around 9,825 Bitcoin—emerging from seized holdings of the Silk Road marketplace—cast a considerable shadow. This intimidating move, totaling roughly $301 million over three transactions, perhaps overshadowed the heartening inflation report.
The meticulously observed cryptocurrency has been confined mostly within the $30,000 – $31,000 spectrum since June 20. This comes amidst investors’ apprehension of reviving hawkish interest rate hikes that threaten to thrust the economy into a dire recession. The lack of clarity over the future price catalyst due to the Securities and Exchange Commission (SEC) indecision on resolution about elusive spot bitcoin Exchange Traded Funds (ETFs) stirred this concern. Huge asset holders like BlackRock and other financial service magnates had, in June, promptly applied for these ETFs, igniting a sense of trade euphoria.
Two big names in research suggested, following the decline, a possible resurgence of Bitcoin to $120,000 or even higher by the conclusion of 2024. Striking evidence to support such a bullish sentiment was communicated by Strahinja Savic, the lead of data and analytics at the Toronto-based crypto platform FRNT Financial. According to Savic, the supply of Bitcoin that typically remains unmoved for over a year has skyrocketed to nearly a 70% all-time peak.
The regulatory environment’s significance was highlighted by noting the impact of the US regulatory bodies filing suit against leading exchanges Binance and Coinbase for alleged violations of securities laws, among other claims. Such legal actions could potentially shift the focus from US-based operations to cities like Hong Kong, Singapore, and Abu Dhabi, which have a more welcoming crypto regulatory climate.
Amid the tumult of data, rules, and investor sentiment, one thing remains clear: The future of crypto remains a blend of optimism leavened with a wise caution.
Source: Coindesk
