Bitcoin price stabilizes amid BTC ETF issuance and unfavorable regulation.
Bitcoin (BTC) held above $63,000 on April 26 despite the negative effects. These include the massive withdrawal of Bitcoin exchange-traded funds (ETFs) from the space in two days, the US Federal Bureau of Investigation's warning of regulatory oversight of unregistered crypto services, and efforts by US senators to scrutinize cryptocurrency transactions.
On April 25, US-based Bitcoin ETFs saw net inflows of $218 million, following $120 million in outflows the previous day, according to Farside Investors. Notably, Franklin Templeton was the only provider to record an inflow on April 25, indicating that the upward trend cannot be attributed to Grayscale GBTC's high fees alone.
US Senators Elizabeth Warren and Bill Cassidy sent a letter on April 25 to the US Department of Justice and Department of Homeland Security. They sought details on measures to address the issue of pseudonymisation in cryptocurrency payments for child abuse material. Referring to a report from Chinalysis, the senators stressed the need to punish those who sell such illegal content.
Bitcoin can ignore negative economic forecasts
Especially after US personal consumption expenditures (PCE) increased by 2.8% year-on-year in March, bitcoin bulls are drawing optimism about the declining global macroeconomic situation. This rate of inflation is higher than the target set by the US Federal Reserve, and it is particularly worrying that US GDP growth in the first quarter was lower than the expected 1.6%.
These figures reinforce market expectations that the Fed will keep interest rates high for an extended period, according to CNBC. George Matteo, chief investment officer at Key Wealth, said: “Taking expectations remain, but they are not certain, and the Fed will need weakness in the labor market before they are confident of tapering.”
According to Lawrence MacDonald, founder of “The Bear Traps Report”, interest payments as a percentage of US federal spending in 2018 It will rise to 12.3 percent in 2024, up from 9.8 percent in 2023. Additionally, recent government bond auctions have shown. A quick reaction from investors, which sent the five-year US Treasury yield to its highest level in six months on April 25.
Bitcoin investors are wary of the unsustainable course of the US government's fiscal policies as the Fed gets into trouble. Lowering interest rates to ease the debt burden could lead to higher inflation, putting more pressure on consumers and businesses, putting the Fed at risk.
The deteriorating macroeconomic conditions extend beyond the US to other major economies. In the year On April 26, the world's fourth-largest economy, Japan, saw a sharp decline in the Japanese yen, which hit its lowest level since 1990. In addition, Japan's consumer price index showed inflation of 1.8 percent in April, which was lower than expected, raising doubts about consumer strength, according to Reuters.
Giger Capital, a user on the X social network, has blocked the Bank of Japan (BOJ) from raising interest rates because of the country's 265 percent debt-to-GDP ratio. While a weak yen benefits exports, it also negatively impacts domestic consumption. Crucially, as the largest holders of US Treasuries, Japanese investor activity exerts significant pressure on the global economy.
Ultimately, the fallout from US spot ETFs, regulatory pressures and global economic downturns have negatively impacted the price of Bitcoin. However, some analysts believe that weak global economic conditions may lead to additional stimulus measures by central banks, which may be beneficial for Bitcoin due to its scarcity and censorship-resistant nature.
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.
