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Top Reasons Why Bitcoin and Altcoins Are Active Today
The cryptocurrency market is growing, thanks to Bitcoin surpassing $63,000 and a whopping $370 million poured into Spot Bitcoin ETFs. This surge has lifted other major altcoins such as Ethereum, Solana and Cardano, pushing the global cryptocurrency market capitalization up 5.11% to a towering $2.34 trillion in just 24 hours, despite a slight decline in 18% in trading volumes.
The successful question: why?
What caused the comeback of cryptocurrencies?
US economic boost
Despite some economic ups and downs, recent US data gave investors a boost of confidence, especially in jobs and manufacturing. Although the manufacturing sector saw a slight decline, with the PMI falling to 49.2%, March job vacancies remained at 8.5 million. Employment increased by 175,000, slightly below forecasts, while the unemployment rate rose to 3.9%. Hourly wages grew 0.2%, slightly below the expected 0.3%.
Despite these twists and turns, investors are still optimistic about employment and production, showing confidence in the cryptocurrency market amid economic uncertainty.
Swings in Bitcoin ETFs
Investor sentiment has changed with the flow of Bitcoin ETFs, seeing both dips and surges, significantly boosting confidence in the cryptocurrency sector. Notably, there was a large outflow of $563.7 million from US Spot Bitcoin ETFs on May 1st. However, recent data shows a notable turnaround, with inflows falling to $34.4 million on May 2, before rising again to $378.3 million on May 3, renewing investors. trust.
Hong Kong embraces cryptocurrency ETFs
The embrace of Hong Kong of Bitcoin and Ethereum ETFs represented a turning point for cryptocurrency prices. The Huaxia, Harvest International and Boshi Bitcoin ETFs together accumulated an impressive $258 million in one week. Hong Kong’s acquisition of 4,218 BTC in three days highlights growing interest in digital assets. While still behind the US in first-week ETF trading volume, this has breathed new life into the previously sluggish cryptocurrency market.
Eye Crypto Retirement Plans
One notable trend is pension plans targeting cryptocurrency investments, signaling a shift in institutional investment strategy and increasing positive sentiment in the cryptocurrency market. Fidelity Digital Assets has revealed growing interest among pension funds in cryptocurrencies. Fidelity’s Manuel Nordeste has noticed growing interest from family offices and high net worth individuals.
However, while 80% of people prefer to invest in cryptocurrencies, only 23% of pension plans have signed up, revealing a gap in adoption rates.
The “buy on the dip” trend gains favor
The idea of “buying on the dip” has encouraged investors to seize recent price drops as prime buying opportunities, especially with the Bitcoin halving event on the horizon. Historical data shows that cryptocurrencies tend to rise after halving events, fueling investor optimism.
The recent cryptocurrency surge mirrors past patterns seen following Bitcoin halvings. Historical trends raise hopes for post-halving gains, along with the introduction of spot Bitcoin ETFs in the US and Hong Kong.
Also check: Fidelity Reveals $5 Trillion Crypto Potential for Retirement Plans: What You Should Know
What do you think of the recent surge? Are you bullish or bearish?