3 reasons why Bitcoin (BTC) has increased today

Bitcoin (BTC) rose 4.5% from June 28 to July 1, breaking the $63,000 barrier for the first time in a week. The previous decline was largely attributed to the German government's BTC exchanges and the Mt. Gox is fueled by fears of BTC transactions as lenders sell large amounts of Bitcoin in bankruptcy proceedings. However, this bearish trend has been reversed by three key factors, including the entry of a new large investor into the market.

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On July 1, the German government moved 1,500 BTC worth $95 million to various cryptocurrency exchanges, according to onchain analytics firm Arkham Intelligence. Similarly, the United States government transferred 1,184 BTC on June 30 to a wallet linked to previously confiscated funds. To date, the German government has $2.8 billion worth of bitcoin assets, primarily from a movie piracy site that shut down in 2013.

These transactions led to speculation that the selling pressure could continue, as US government wallets hold $13.4 billion worth of bitcoin, according to data from Arkham Intelligence. The US government's most important recent transaction was on June 26 when it sent 3,940 BTC, worth $214 million, to a Coinbase Prime account. These funds were earlier recovered from drug dealer Banmeet Singh in 2024.

Although these government sales have sold more than $300 million, the price of Bitcoin has shown resilience. This resistance was reinforced as Bitcoin exchange-traded funds (ETFs) took part of the offering, adding a net $137 million in four trading days between June 25 and June 28. In addition, the increasing instability in traditional markets and the introduction of significant new players in the Bitcoin ecosystem strengthened the confidence of investors.

Billionaire Michael Dell, the founder and CEO of Dell Technologies, on June 21 launched a sensational message about Bitcoin investment. Dale, who was listed by Forbes as one of the 20 richest people in the world, posted a meme showing the cookie monster holding some bitcoin-shaped cookies. Bitcoin Layer analyst Joe Consorti highlighted that the Dell company has $5.83 billion in cash and cash equivalents.

On July 1, Amber Japan, a Tokyo-based Sony company, changed its name to S.BLOX to focus on crypto business. The company emphasized that the updates are aimed at improving user-friendliness and expanding its features. S.BLOX, a member of the Japan Virtual Currency Exchange Association (JVCEA), has a market capitalization of $10.5 billion according to recent financial reports. Sony Corporation had $11.8 billion in cash and cash equivalents as of March 2024.

The inflated price of technology stocks increases the demand for alternative assets, including BTC

Some investors' improved view of Bitcoin stems from concerns that tech stocks in the US are overvalued, as second-quarter sales estimates may fall. According to Yahoo Finance, research by Charlie Bilello from Creative Planning put forward sales estimates for Nvidia at 21 times, a significant jump from 12 times two months ago. For context, Microsoft trades at 12 times forward sales and Apple at eight times.

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Analysts also forecast a 3.7% decline in Tesla's second-quarter sales due to increased competition in China, according to Yahoo Finance. The electric vehicle company is scheduled to announce its corporate earnings on July 2. Earlier, CEO Elon Musk dropped plans for a new and more affordable electric vehicle by 2024, raising some concerns. Tesla stock is down 15.5% since the beginning of the year.

In conclusion, the rising demand for Bitcoin reflects investors' dissatisfaction with the valuation of traditional market assets such as stocks and real estate. The S&P 500 hit its all-time high on June 28, with gains largely focused on a handful of tech stocks. Meanwhile, the median price for a new single-family home in the U.S. fell to a six-month low in May.

Why this dynamic has eased concerns, uncertainty and doubt surrounding the US and German governments, has paved the way for a rally above $63,000.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.