05/16 update below. This post was originally published on May 15
Bitcoin
Bitcoin
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The bitcoin price has topped $65,000 per bitcoin for the first time since early May as traders ramp up their bets the Federal Reserve will soon declare victory in its war on inflation and cut interest rates—though Elon Musk has recently joined other high profile investors in warning “stealth money printing” could destroy the U.S. dollar.
Ahead of the key inflation data that sent ethereum, XRP
XRP
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Bitcoin, ethereum, XRP and crypto traders are increasingly betting Federal Reserve chair Jerome … [+]
“Bitcoin is still early in an upcycle,” Tom Lee, Fundstrat Global Advisors managing partner and head of research, told CNBC. “So the idea that it can get to $150,000 this year is still within our base case.”
The latest monthly U.S. consumer price index data showed the pace of inflation in the U.S. eased slightly in April, rising 0.3% versus 0.4% in March and against economist forecasts of 0.4%.
“I think it does help that the Fed is reiterating its view on inflation and its being relatively more dovish than where the market is,” Lee said. “So I think that’s the process of why markets are recovering.”
The bitcoin price has rocketed by around 75% since the beginning of the year, climbing along with expectations the Federal Reserve will begin to cut interest rates this year.
“We know there’s a lot of pent-up demand,” Lee said. “Capital spending is picking up, the ISMs [international securities markets] are turning up, there’s $6 trillion in cash on the sidelines and people have been cautious for more than two years now.”
05/16 update: The world’s largest futures exchange operator CME is gearing up to launch add spot bitcoin trading, it was reported by the Financial Times, citing a leak from three anonymous sources.
The unconfirmed plan to open up CME to bitcoin trading is a response to “surging demand” from Wall Street for bitcoin following the launch of a fleet of spot bitcoin exchange-traded funds (ETFs) in January—highlighting the amount of capital that remains “on the sidelines” of the bitcoin and crypto market.
The 11 spot bitcoin ETFs that exploded onto Wall Street earlier this year have taken the financial establishment by storm, rocketing to around $50 billion of combined assets under management since January and becoming some of the fastest growing ETFs on record.
BlackRock’s
BlackRock
However, some bitcoin and crypto market analysts have downplayed the Federal Reserve’s long-term impact on the bitcoin price.
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The bitcoin price has topped its 2021 peak, boosting the price of ethereum, XRP and the wider crypto … [+]
“While Federal Reserve policies may induce short-term volatility, they do not fundamentally change bitcoin’s long-term trajectory,” Leena ElDeeb, research associate at bitcoin and crypto investment company 21Shares, said in emailed comments. “Therefore, bitcoin currently holds a unique position as a risk-on and risk-off asset, navigating unique market dynamics.”
The bitcoin price rally this year has been turbocharged by a fleet of new Wall Street spot bitcoin ETFs, opening up the bitcoin market large swathes of investors that see crypto exchanges as risky.
Last month, a major Wall Street bank leak suggested brokers could soon be given the green light to recommend the spot bitcoin ETFs to their clients.
