Bitcoin rebounded by 10% after bouncing off the lows near $52,000. Institutional momentum builds as ETFs flow near $18 billion. Concerns over tighter crypto regulation ease after Harris' comments.
Despite September's reputation as Bitcoin's worst month, the cryptocurrency has recovered to trade from around $52,000 to more than $63,000.
Bernstein analysts point to several key factors driving its rebound.
The Fed
The Federal Reserve's 50 basis point rate cut last week sparked renewed interest in risk assets, with bitcoin benefiting from expectations of looser monetary policy and a weakening US dollar.
A subtle strategy
Institutional momentum also drove Bitcoin's rally.
MicroStrategy's aggressive accumulation of bitcoin — now holding 252,220 in bitcoin — is further bolstering market confidence.
ETF inflows
Bitcoin exchange-traded funds have seen $800 million in inflows in the past 10 days. Flows have calmed recently after ETF launches in February piled up near record highs. $18 billion.
The recent approval of options trading by the SEC on BlackRock's iShares Bitcoin Trust has also fueled renewed interest. This opens up another avenue that could soon drive more inflows into Bitcoin ETFs.
A comparison of gold
With the U.S. financial debt rising to nearly $35 trillion, Bernstein said bitcoin is seen as a non-sovereign alternative to traditional assets like gold.
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Moreover, gold prices have reached new all-time highs $2,620 to the ounce today.
Fears are reduced
Bernstein analysts also note that earlier market fears have largely subsided.
The German government's $3 billion Bitcoin sale and the long-awaited Mt. Gox's bankruptcy filings have eased concerns.
Moreover, concerns surrounding the potential for stricter crypto regulation by Vice President Kamala Harris have softened, as her recent comments suggest a more measured approach, focusing on consumer protection while still supporting innovation.
Related TopicsBitcoin ETFMicroStrategyFederal Reserve
