Bitcoin remains stable around $30,400, unaffected by Fidelity’s application for a bitcoin spot ETF and stronger-than-expected employment data from the United States.
Fidelity has joined Blackstone, Invesco, and WisdomTree in submitting applications for bitcoin spot ETFs with the SEC over the past two weeks. These initiatives have spurred investor enthusiasm and driven cryptocurrency prices higher.
The US stock market largely shrugged off positive economic data – a revised 2% GDP growth and a decrease in weekly unemployment claims – indicating that inflation will continue to be a concern and supporting the possibility of two more interest rate hikes by the Federal Reserve in 2023. Such monetary tightening has repeatedly caused instability in asset markets over the past year.
At the Fourth Banco de Espana Financial Stability Conference, Fed Chair Jerome Powell highlighted the central bank’s uncertainty about the appropriate inflation-fighting strategy in the coming months, despite recently hinting at future interest rate hikes.
Akash Mahendra, Director of Haven1 Foundation and Portfolio Manager at the digital asset platform Yield App, wrote that while the “Bitcoin ETF frenzy” is “good news for the price of Bitcoin,” the success of the industry will heavily depend on innovation.
Mahendra wrote: “The validation from large institutions is fantastic, and we all hope that BlackRock’s ETF will be successful – especially because a rejection would be really, really bad for Bitcoin.” “However, at its core, blockchain is truly a place for innovation beyond what is available in traditional finance.”
Despite its notorious volatility, specific data on Bitcoin has consistently shown higher growth, highlighting the confidence of Bitcoin investors in the asset, not to mention their trend of holding BTC.
According to on-chain analysis firm Glassnode, Bitcoin’s on-chain activity is currently at an all-time high, despite enduring a harsh bear market that saw prices drop from nearly $70,000 in 2021 to around $16,000 in early 2023. Bitcoin is currently trading above $30,000.
However, over 55% of Bitcoin’s circulating supply has remained dormant since 2021, reflecting a 10% decrease during this period. Meanwhile, ConDesk’s Bitcoin Sentiment Index, another measure of investor sentiment, has seen a significant uptick after spending a majority of the past few weeks in a bearish trend.
The recent decrease in supply indicates a fundamental shift in investor sentiment towards the asset. So far, investors appear to be willing to accumulate and hold the asset.