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All it took was one good month. Actually, just three weeks. In that time period, <a href="https://xpertsstudio.com/will-bitcoin-price-fall-below-75000-today-after-cpi-news/” title=”Will Bitcoin Price Fall Below $75,000 Today After CPI? | News”>Bitcoin (CRYPTO: BTC) soared by 25% and completely changed the narrative around the crypto market.
It’s no surprise, then, that new investor money is flowing into the Bitcoin exchange-traded funds (ETFs) at a rapid pace. They just wrapped up their best three-week stretch of the year, pulling in $3.8 billion from investors. So is Bitcoin finally back?
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A change in market sentiment for Bitcoin
Let’s be honest here: Nothing fundamentally changed with Bitcoin over the past three weeks. Bitcoin is a cryptocurrency, not a company, so there have been no earnings announcements, no product announcements, and no splashy news events.
All there has been is a completely unexpected change in market sentiment. It’s easy to see this with the Crypto Fear & Greed Index. In a span of just a few days in August, it flipped from “fear” to “extreme greed.”
This change in sentiment is primarily due to two events that took place in August. One took place in public, the other largely behind closed doors.
The “public” event, of course, was the high-level meeting of top crypto executives at the White House. At the meeting, President Donald Trump fully endorsed new crypto market legislation, and gave his tacit support for the U.S. government to start buying Bitcoin in size.
The “behind closed doors” event was the U.S. Treasury Department stepping up its buyback of long-term government debt in order to bring down its cost of borrowing. That had nothing to do with Bitcoin directly, of course, but it focused investors on the massive debt load of the U.S. government.
This $40 trillion debt load may no longer be sustainable, especially if borrowing costs remain high. A potential hedge against looming fiscal disaster would presumably be Bitcoin, which has always presented itself as a potential alternative to fiat currencies.
Can you trust the Bitcoin summer rally?
Given that investor sentiment can turn on a dime (especially in the crypto market), it can be hard to trust the Bitcoin summer rally. After hitting $80,000, it abruptly reversed course and is now trading for $77,000 in mid-September.
That’s cause for some concern. After all, Bitcoin briefly dropped below $60,000 in June. Some think it might retest those lows before it can mount an epic rally. Long story short, if something doesn’t happen fast, there might not be enough time for Bitcoin to get back to the $100,000 price level by the end of the year.
Source: finance.yahoo.com