3 reasons why Bitcoin is up today
Weak tech business earnings, spot Bitcoin ETF inflows, and the likely entry of a new significant investor pushed the Bitcoin price beyond $63,000.Bitcoin $63,033 increased by 4.5% from June 28 to July 1, breaking through the $63,000 resistance for the first time in a week. The previous fall was mostly caused by anxiety raised by the German government’s BTC transactions with exchanges, as well as concerns about Mt. Gox creditors selling substantial sums of Bitcoin during the bankruptcy process. However, three significant factors, including the potential arrival of a new major investor into the market, helped to reverse the bearish trend.
Bitcoin FUD cedes after a Michael Dell post and spot ETF inflows
According to Arkham Intelligence, on July 1, the German government sent 1,500 BTC worth $95 million to several cryptocurrency exchanges. On a similar issue, the US authorities transferred 1,184 BTC on June 30 from a wallet associated with previously confiscated cash. The German government currently owns $2.8 billion in Bitcoin assets, the majority of which were acquired via a defunct movie piracy site that shuttered in 2013.
These transfers sparked concern that the selling pressure will continue, as the United States government’s wallet also contains Bitcoin worth $13.4 billion, according to Arkham Intelligence. The most significant recent transaction by the United States.
Despite government sales reaching $300 million, Bitcoin’s price remained resilient. This resiliency was boosted by the spot Bitcoin exchange-traded funds (ETFs), which absorbed a portion of the offer, adding a net $137 million in just four trading days from June 25 to June 28. Furthermore, the growing instability in traditional markets, along with the entry of large new participants into the Bitcoin ecosystem, has boosted investor confidence.
Billionaire Michael Dell, founder and CEO of Dell Technologies, stirred interest on June 21 with a hint about a potential Bitcoin investment. Dell, who Forbes lists as one of the world’s 20 richest people, shared a meme of the Cookie Monster clutching some Bitcoin-shaped cookies.
On July 1, Amber Japan, a Sony subsidiary based in Tokyo, changed its name to S.BLOX to focus on bitcoin trading. The company emphasized that the changes aim to improve user experience and expand its capabilities. S.BLOX, a member of the Japan Virtual Currency Exchange Association (JVCEA), has $10.5 billion in capital, according to the most recent financial filings. Sony Corporation’s cash and equivalents were $11.8 billion as of March 2024.
Inflated tech stocks valuation boosts demand for alternative assets, including BTC
Some investors’ positive stance on Bitcoin originates from concerns that IT companies in the United States have reached exorbitant prices, as second-quarter sales projections may fall short. According to Yahoo Finance, a study conducted by Charlie Bilello of Creative Planning found a “super steep” forward sales projection of 21 times for Nvidia, up from 12 times just two months ago. For comparison, Microsoft trades at 12 times projected sales, while Apple trades at eight times.
Furthermore, experts expect Tesla’s second-quarter sales to fall 3.7% due to stiff competition in China and sluggish demand caused by a dearth of inexpensive new models, according to Yahoo Finance. The electric vehicle manufacturer is scheduled to release its corporate earnings on July 2. Earlier in 2024, CEO Elon Musk cancelled plans for a new, more inexpensive electric vehicle, raising concerns. Tesla’s stock is down 15.5% since the beginning of the year. To summarise, the increasing demand for Bitcoin reflects investors’ discontent with the prices of traditional market assets such as equities and real estate.
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