Bitcoin has made a strong comeback, jumping 10% after hitting a low of around $52,000. Now, it’s trading above $63,000. This recovery is surprising, especially since September is often seen as a tough month for Bitcoin. Analysts at Bernstein have pinpointed several key reasons for this rebound.
The Federal Reserve recently cut interest rates by 50 basis points. This move has sparked new interest in riskier assets, and Bitcoin is benefiting from expectations of a more relaxed monetary policy and a weaker US dollar.
MicroStrategy is also making waves in the market. The company has been aggressively buying Bitcoin and currently holds 252,220 BTC. This kind of institutional support boosts confidence among investors.
ETF Inflows have seen significant activity as well. In just the last 10 days, Bitcoin exchange-traded funds have attracted $800 million. This comes after a record inflow of nearly $18 billion earlier this year. Plus, the SEC recently approved options trading on BlackRock’s iShares Bitcoin Trust, which could lead to even more investment in Bitcoin ETFs.
With the US fiscal debt nearing $35 trillion, many are looking at Bitcoin as a non-sovereign alternative to traditional assets, much like gold. Bernstein noted that gold prices recently hit a new high, surpassing $2,620 per ounce.
Finally, market fears that once loomed large are fading. Concerns about the German government’s $3 billion Bitcoin sale and the long-anticipated Mt. Gox bankruptcy distributions have eased. Additionally, worries about Vice President Kamala Harris and her potential for strict crypto regulation have lessened. Her recent comments suggest a more balanced approach, focusing on consumer protection while still encouraging innovation.