Bitcoin has recently been on an uptrend for a number of reasons. The hope of a Bitcoin ETF is building yet again, the stock-to-flow pricing model for Bitcoin has maintained accuracy and recently both the SEC and Federal Reserve chairmen have said that they have no intention to ban Bitcoin.
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While the top crypto has been in this uptrend, it still needed to pass a key resistance level of $52,000 for confidence to build that the market wouldn’t deteriorate into bear territory.
Toady Bitcoin blasted through that level, going up over 6% at one point. This has pushed its year-to-date performance to over 83% and its one-year performance to a staggering 408%.
Bitcoin’s meltdown in May was primarily rooted in uncertainty fueled by Elon Musk and Tesla’s move to no longer accept Bitcoin. Later more uncertainty came in the form of a China ban. But after this fear subsided a slow and steady stream of positive news began to build and in the past weeks there have been a series of fortunate events.
SEC Will Not Ban Bitcoin
Yesterday the chair of the SEC, Gary Gensler, said that the commission has no intention to ban Bitcoin. When asked if they would try to ban crypto in order to promote a central bank digital currency Gensler simply said, “no, that would be up to Congress.”
A week earlier the Federal Reserve chair, Jerome Powell, said that the Fed has no interest in banning Bitcoin or cryptocurrency.
But positivity in the Bitcoin space started before the SEC news when the first nation adopted Bitcoin as legal tender. El Salvador adopted Bitcoin as a duel currency alongside the dollar on September 7th. While El Salvador is a tiny nation, 24.1% of the countries GDP comes from remittance payments.
Currently, these payments are facilitated through the use of systems like Western Union. These systems can charge large fees to send money around the world. Bitcoin now allows the people of El Salvador to circumvent these fees and now that it is also legal tender they can use Bitcoin without concern over taxes.
Most importantly, El Salvador has started a trend among nations experiencing remittance issues or even embargo and sanction issues. The country has demonstrated how these issues can be avoided through the use of Bitcoin. Other countries looking at the potential adoption of bitcoin include Panama, Paraguay, Brazil, Argentina and more.
Twitter’s Bitcoin Integration
Twitter has been rolling out the ability for its users to tip each other using Bitcoin. To do so, they are using the Strike payments API which uses the lightning network. This means that Bitcoin payments on Twitter are instant and nearly feeless.
The most important aspect of this is that users can use this system to send more than just Bitcoin. It is possible to send dollars over this network and still make use of the speed and low cost. This was a huge moment for Bitcoin as it proved that Bitcoin was a more than viable option for day-to-day payments and not just as a store of value.
Hope of a Bitcoin ETF
The SEC has been taking a closer look at Bitcoin ETFs and the chairman, Gary Gensler, has also shown support for such an asset as it would increase investor protection. Many proponents of a Bitcoin ETF argue that it would allow for the less tech-savvy and those more used to the traditional securities markets a way to safely find exposure to the asset class.
The SEC has extended its timeline in reviewing the various ETF applications. While it has done this in the past, the demand for the SEC to create more protected options for investors seeking to enter this space has grown substantially to the point that it can non longer be ignored. Such assets already exist in Canadien markets and it is likely only a matter of time for U.S. markets.
The approval of such a product would widen the opening for investors to gain crypto exposure and could help to increase price which is why the prospect of a Bitcoin ETF is so bullish to investors.