Bitcoin has jumped 15% in the past five days, dragging other cryptocurrencies. But what drives the prices up?
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Recently, SEC chairmen Gary Gensler spoke favorably of a Bitcoin ETF. Gensler expressed support for Bitcoin futures ETFs on Wednesday, saying those types of ETFs that invest in futures contracts under the 1940 Investment Company Act offer investors higher protection than many. existing options.
The so-called 1940s law “offers important protections to investors. I look forward to the staff’s review of these files.
On September 29, the SEC released a statement that it would extend the approval deadline for Bitcoin ETF applications by 45 days. It was a sign that the regulator is finally taking a closer look at Bitcoin ETFs instead of dismissing them.
Cryptocurrency investors have long been waiting for when an ETF-like product emerges in the United States. Such products already exist in Canada and proponents argue that they allow more secure entry into Bitcoin and exposure to crypto for those less tech-savvy and that those who are used to traditional securities markets would feel more secure. familiar.
Gary Gensler’s support for these products and the news that the SEC is evaluating current applications may have sparked new hope in the eyes of investors.
The stock-flow model still on the right track
Bitcoin’s stock-flow pricing model, which was first introduced by a pseudonymous internet user by the name of PlanB, is still on track to hit its expected price of $ 135,000 by December.
His model predicts the price of Bitcoin as its supply becomes increasingly stuck in wallets as fewer Bitcoins are minted every four years, creating a low flow of fresh Bitcoin entering circulation.
PlanB’s forecast has been correct for the close of the past two months and PlanB has given a price target of $ 63,000 for October. Not only that, but the stock-to-flow pricing model has been largely accurate since its inception.
Crypto enthusiasts and newcomers have likely taken note, attributing the price increase from October.
The Federal Reserve will not ban Bitcoin
Federal Reserve Chairman Jerome Powell said on Thursday that the Central Bank has no plans to ban Bitcoin during a hearing with the House Committee on Financial Services.
Rep. Ted Budd from North Carolina asked Powell if the Federal Reserve wanted to ban cryptocurrencies. Powell responded by saying no, but stablecoins could be subject to tighter regulatory oversight.
“No, no intention to ban them, but stablecoins are like money market funds, they are like bank deposits, but they are to some extent outside the regulatory scope. And they should be regulated. Same activity, same regulations. “
While stablecoins could be subject to more regulation as they represent U.S. dollars, Powell’s comments on normal cryptocurrencies have led to a bullish response from investors.