Bitcoin has recently seen an uptrend for a number of reasons. Hope for a Bitcoin ETF is building again, the stock-flow pricing model for Bitcoin has retained its precision and recently the chairmen of the SEC and Federal Reserve said they did not have the intention to ban Bitcoin.
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Although the highest crypto was in this uptrend, it still needed to break through a key resistance level of $ 52,000 to be confident that the market would not deteriorate into bearish territory.
Toady Bitcoin broke through this level, rising over 6% at one point. This has pushed his year-to-date performance to over 83% and his one-year performance to an astounding 408%.
The Bitcoin collapse in May was mainly rooted in uncertainty fueled by Elon Musk and Tesla’s decision to no longer accept Bitcoin. Later, more uncertainty came in the form of a ban from China. But after that fear subsided, a slow and steady stream of positive news started to pile up and over the past few weeks there has been a series of happy events.
The SEC will not ban Bitcoin
Yesterday, SEC Chairman Gary Gensler said the commission has no plans to ban Bitcoin. When asked if they would try to ban crypto in order to promote a central bank digital currency, Gensler simply replied, “No, it would depend on Congress.”
A week earlier, Federal Reserve Chairman Jerome Powell had said the Fed had no interest in banning Bitcoin or cryptocurrency.
But the positivity in the Bitcoin space began before the SEC news broke when the first nation adopted Bitcoin as legal tender. El Salvador adopted Bitcoin as a dueling currency alongside the dollar on September 7. While El Salvador is a small country, 24.1% of the country’s GDP comes from remittances.
Currently, these payments are facilitated by the use of systems such as Western Union. These systems can charge a significant fee to send money around the world. Bitcoin now allows residents of El Salvador to bypass these fees and now that it is also legal tender, they can use Bitcoin without worrying about taxes.
More importantly, El Salvador has started a trend among countries facing money transfer issues or even embargo and sanctions issues. The country has demonstrated how these problems can be avoided through the use of Bitcoin. Panama, Paraguay, Brazil, Argentina, and many more are considering the potential adoption of bitcoin.
Twitter Bitcoin Integration
Twitter has rolled out the ability for its users to tip each other using Bitcoin. To do this, they use the Strike payment API which uses the Lightning network. This means Bitcoin payments on Twitter are instant and almost unresponsive.
The most important aspect is that users can use this system to send more than Bitcoin. It is possible to send dollars over this network while enjoying the speed and low cost. It was a big moment for Bitcoin as it proved that Bitcoin was a more than viable option for daily payments and not just as a store of value.
Hope of a Bitcoin ETF
The SEC has taken a closer look at Bitcoin ETFs and Chairman Gary Gensler has also expressed support for such an asset as it would increase investor protection. Many supporters of a Bitcoin ETF argue that it would allow those less tech savvy and those more familiar with traditional securities markets a way to safely find exposure to the asset class.
The SEC has extended its timeline for reviewing various ETF applications. Although it has done so in the past, the demand for the SEC to create more protected options for investors seeking to enter this space has grown dramatically to the point that it can no longer be ignored. Such assets already exist in Canadian markets and it is probably only a matter of time for US markets.
Approval of such a product would expand the possibility for investors to gain exposure to crypto and could help raise prices, which is why the prospect of a Bitcoin ETF is so bullish for investors.