Bitcoin (BTC) may be down 10% year-to-date, but it is not out. The flagship cryptocurrency is rising over 3% today on solid trading volume. Despite its construct as a non-correlated asset to traditional asset classes like stocks, bitcoin has been following the crowd of late. Today is no exception as the bitcoin price moves higher alongside gains in the stock market. Optimism that the Federal Reserve will hold interest rates steady is a likely catalyst for Bitcoin’s gains today.
Nevertheless, it’s hard to ignore that the bitcoin price is a steep 23% below its all-time high of $109,000 reached in December. Since then, it’s safe to say that the leading crypto has taken investors on a roller coaster ride.
Key Points
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The bitcoin price is gaining 3% on the day.
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Bitcoin has been trading correlated to stocks of late.
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Positive Catalysts
In addition to wider market optimism, bitcoin also has other catalysts. Among them, tech innovation bull Cathie Wood of ARK Invest has reaffirmed her uber-bullish $1.5 million price tag on BTC by 2030. Despite the volatility in the BTC price, Wood told CoinDesk that the markets are currently in a “risk-off” cycle, and that Bitcoin has “almost been a leader in risk-on, risk-off” sentiment. Wood said crypto is still in a bull market and deregulation in the U.S. market will be key to institutions coming off the sidelines and dipping their toe into crypto. As they begin allocating to BTC, the risk-adjusted returns will rise in her opinion.
Also, more companies have been adding BTC to their balance sheets, following in the footsteps of early movers like MicroStrategy (Nasdaq: MSTR) and Tesla (Nasdaq: TSLA), to name a couple. Semler Scientific has been scooping up BTC, while listed metals and mining company S. Science is reportedly gearing up to do the same.
Other catalysts include new Bitcoin ETFs that have made their way into the markets, which could potentially attract mainstream investors. According to The Block, the U.S. spot BTC ETF saw its biggest daily net inflows since early February, reaching a whopping $274 million. The performance was a reversal from five straight weeks of outflows from BTC ETFs, selling that has pressured the price and weighed on sentiment.
Now What?
The Bitcoin halving event that took place in 2024 paved the way for bullish sentiment in the crypto market. But the next halving event won’t take place until 2o28, so investors might not want to hold their breath for that. For now, investors could expect some more volatility, which is inherent in the crypto markets. But if ARK Invest’s Cathie Wood is right, they could also look for Bitcoin to set the risk-on, risk-off direction in the markets rather than continuing to be influenced by what the stock market is doing.
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