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| By Alex Benfield |
I hope you all had a great weekend and a wonderful Fourth of July!
Once again, the crypto market is on the edge of a bullish breakout. But so far, it has been unable to break above the key resistance levels needed to do so.
We are again left wondering what it will take to push things in favor of the bulls.
For weeks now, Bitcoin (BTC, "A-") has been teasing bullish investors. Although it recorded a yearly high recently, it has failed to establish itself above the key $31,000 level.
However, Bitcoin is still trading above its moving average, and its chart has been looking increasingly bullish over the past month or so.
While we’ve been eagerly awaiting a bullish breakout that hasn’t happened yet, it does feel inevitable.
You see, there may be reason to believe the winds of change are blowing favorably for the crypto market. After all, five ongoing developments are poised to positively influence the growth trajectory of this space over the coming months.
Development No. 1: Monetary Policy. The recent pause in the Federal Reserve's rate hikes could signal the nearing peak of the fed funds rate. While Fed Chair Jerome Powell suggests additional hikes before year's end, a slowdown in the rate increases might help steady the markets.
Since higher interest rates typically draw liquidity from risk assets like Bitcoin, a slowdown could ease this liquidity drain. This could potentially create a more favorable environment for crypto investments.
Development No. 2: Institutional Interest. As the crypto market matures, it's drawing the attention of financial behemoths like BlackRock (BLK), ARK Invest and Fidelity. These companies have all submitted applications for spot Bitcoin exchange-traded funds.
Now, a green light from the Securities and Exchange Commission could debunk claims of its crypto aversion. More than that, such approval could catalyze a seismic shift in market dynamics, ushering in an era of institutional capital flow into crypto.
This is exciting because the market has been eagerly anticipating this influx of “real” institutional money, as well as the potential for spot ETFs backed by Bitcoin rather than futures contracts.
Development No. 3: Crypto Adoption. The surge in institutional interest and potential capital injection is not just about pumping up prices. It brings with it the possibility of broader acceptance and usage of cryptocurrencies, both as a store of value and a medium of exchange.
Overall, this could boost the entire crypto ecosystem, encouraging innovation and development and accelerating the pace of crypto adoption.
Development No. 4: Regulatory Clarity. While regulatory hurdles have been a challenge for the crypto market, we are beginning to see more clarity and understanding from regulatory bodies worldwide.
Although the U.S. may be lagging on this front, many other countries are beginning to realize the opportunity in crypto and are establishing regulatory guidelines in anticipation of further growth. This increasing legal certainty could attract more investors to the space, boosting market growth.
Development No 5: Retail Involvement. Not to be underestimated is the impact of retail investors. After all, the GameStop (GME) saga and the Dogecoin (DOGE, “B-”) frenzy have both demonstrated the power that retail investors hold in today's connected world.
With crypto becoming increasingly accessible and mainstream, the involvement of retail investors could also drive significant growth in the market.
Overall, the next few months could be transformative for crypto.
Remember, the 2020/2021 bull run was ignited by mere rumors of institutional capital entering the crypto space. If these institutional investors dive in headfirst — spurred by the introduction of a spot Bitcoin ETF — the crypto market could witness an unprecedented surge.
And as always, we will be here to keep you posted on any important details as these developments unfold.
Best,
Alex
