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With Bitcoin holding up despite the turmoil, many began to see it as a haven for their resources for the time being.
The Bitcoin price pump continued on Wednesday as the price spiked to $55,000. This is the cryptocurrency’s highest in five months and it comes even as institutional investors jumped on the bull trend. This week alone, the bitcoin price has risen by more than 13%.
Favorable developments in Washington this week have been linked to the bitcoin price pump. Speaking in front of the House Financial Services Committee, SEC Chairman Gary Gensler stated that he had no plan to ban cryptocurrency. Gensler noted that a ban would be up to Congress. With his comment mirroring that of Federal Reserve Chairman Jerome Powell, institutional investors found the impetus to jump on cryptocurrencies.
Also, the Chief Investment Officer of Bitwise Asset Management noted that favorable regulation is the primary driver of bull trends in cryptocurrency. A survey of financial advisors by Bitwise found out that the primary reason for not allocating resources to cryptocurrency in the last three years has been regulatory uncertainty.
Hougan said, “Regulatory uncertainty is what’s still keeping investors out of the market and every time we get a step closer to regulatory clarity, you see this kind of reaction.”
Head of market insights at Genesis, Noelle Acheson, noted there were clear indications the bitcoin price pump is institutionally driven.
She said, “Institutional investors move as a herd, they are momentum chasers. When they see this kind of momentum, they start to think, what am I going to miss?” Acheson stated that institutions do not like to be outperformed by their competitors. Hence, they’ll pile into the trend.
Bitcoin Price Pump: Falling Stocks or a Safe Haven?
Following Janet Yellen’s comments that the US economy could enter a recession in as little as two weeks, the market became tumultuous. Rising rates, high inflation, and the debt limit dented investor sentiment have caused a free fall of stocks.
With Bitcoin holding up despite the turmoil, many began to see it as a haven for their resources for the time being. CNBC’s Jim Cramer noted that if what Yellen said becomes true, the dollar won’t be as valuable as crypto.
As of the time of writing, the price of bitcoin was hovering at $54,605.94 according to CoinGecko.