Summary
- The institutional view of Bitcoin may have taken a hit in recent days, but it remains positive.
- Regulatory authorities are increasingly embracing digital currencies and developing ways of integrating them while maintaining watch over criminal use.
- US Bitcoin ETF approval to have a major impact on price trajectory.
After sliding below $50,000 in the past week, Bitcoin was on resurgence, going as high as $56,000 yesterday. The cryptocurrency was trading at $54,796 at the time of writing, having gained 1.8% in the past 24 hours. The price was also 12% higher than a week ago.
Institutional adoption has been stable, but the recent slump seems to have made investors grow cold feet. Tesla’s announcement that it sold part of its BTC inventory has only exacerbated such fears. Nonetheless, Bitcoin is on a strong fightback.
Institutional adoption still stable
Despite recent turbulence, Bitcoin is still on the ante of institutions. Having spent a significant amount of time in the $50,000s, BTC is unlikely to lose its appeal as an investment asset.
The greatest fear among investors is the volatility of the crypto market.
While this is a well-founded concern, recent market slumps have been followed by relatively fast rebounds. It happened in February, March, and April.
Many stocks spend longer periods on the downturn than BTC. The fact that BTC is on a rebound will therefore likely drive it towards achieving more stability before attempting new all-time highs.
A Tokyo video game maker, Nexon, has recently announced that it added nearly USD100 million worth of BTC to its balance sheet. The move is seen as a diversification strategy aimed at getting the most out of BTC’s expected appreciation. The company revealed that it was keen on having BTC due to its liquidity as well as stability.
Elsewhere, Bequia, an island in the Caribbean, has been popularizing BTC in the territory. The initiative aims to promote the use of BTC as a medium for transactions, including but not limited to buying property on the island. BTC seeks to provide a reprieve for the island residents, whose businesses have been hindered by the inefficiencies of local banks.
Similarly, the CEO and Chair of Landry, Tilman Fertitta, recently announced acceptance by the hotel chain giant of BTC and other digital currencies for payment. The company’s main brands, including Bubba Gump Shrimp Company and The Steakhouse, will accept the digital assets in the next three months. This is a testament to the strong faith in cryptocurrencies, especially from an industry hard-hit by the covid-19 pandemic.
Regulatory intervention and the war on crypto-crime
As concerns remain regarding transactions in the crypto-sphere, the Government of Turkey will start regulating BTC exchanges. In a move seen as largely embracing digital currencies, the plan will see the nation having a central bank to custody digital currencies. This follows recent occurrences where two major exchanges, Vebitcoin and Thodex, locked out their clients.
The much-awaited Bitcoin ETF in the United States is a major milestone in the BTC price trajectory. The Securities and Exchange Commission in the United States has recently slowed down the decision regarding the VanEck Bitcoin ETF. This is because the current head of SEC, Gary Gensler, is reviewing the application. A favorable outcome is expected to increase exposure to BTC in the world’s largest economy, thereby propelling prices higher.
In a major win against digital currency crime, the government of the United States has arrested and charged Roman Sterlingov for laundering money using a BTC mixer. Roman Sterlingov was arrested in Los Angeles.
Documents indicate that Roman is being accused of laundering more than 1 million BTC through the BTC fog mixer. The use of BTC in fraudulent activities such as money laundering and ransomware attacks is one of the biggest hindrances to its acceptance in various jurisdictions in the world.
BTC/USD technical outlook
The Relative Strength Index (RSI) of the BTC/USD pair is above the midpoint at 66, signaling that the buying momentum could slow down.
BTC price can find the first support at $54,242, and the second support should be at $52,895. With the momentum slowing down, the first resistance is likely $55,164 and the second one at $55,979.
