BTC skyrockets just because of ETFs?

The price of Bitcoin has reached its highest level since May 2022, a 17-month high. The rally caught many by surprise and has given the crypto market a bullish vibe as the "king of cryptocurrencies" has steadily risen. So what are the reasons for the rally, and what's next for BTC?

As mentioned in a previous article by veDAO Research Institute, although fake news has put the price of BTC on a roller coaster, the market sentiment is positive and the subsequent trend will be positive. In this post, veDAO Research Institute will bring the reasons related to the recent BTC rise and analyze the subsequent trend.

Reasons for BTC Price Rise Considering that the crypto market is susceptible to volatility, a single factor cannot be considered as the sole reason for the uptrend. In the past few days, BlackRock's BTC spot ETF appeared on the DTCC's website and was briefly removed and then added back, which is also considered to be one of the reasons for the rally. Beyond that, there are a few more influential factors:

BTC halving is imminent There are less than 6 months until BTC is halved. The cryptocurrency community expects this event to start the next bull cycle. According to analyst Michaël van de Poppe and others, now (6 to 10 months before the BTC halving) is the best time to invest in torrents, and venture capitalists can't wait to start getting funded.

The US Banking Crisis and BTC The U.S. banking crisis that occurred in March of this year became a boon for BTC and the crypto market. One of the most important reasons for this was the lack of correlation between cryptocurrencies and the US stock market. While the banking system has relatively stabilized since then, the current market conditions once again hint at a similar scenario in the making.

U.S. Banks Taking Another Hit

The four biggest banks on Wall Street in the U.S. - Citi (C), Morgan Stanley (MS), Goldman Sachs (GS) and Bank of America (BAC) - are currently at their lowest levels since that banking crisis. The year-to-date performance of these banks shows that their stock prices are currently at their lowest, even lower than they were in March of this year. Citigroup's shares are down 14% since the beginning of the year, and Goldman Sachs is down nearly 13%. Morgan Stanley has lost more than those two, having fallen 16% so far this year, while Bank of America leads the way with a 23% decline.

Cryptocurrencies are negatively correlated with Bank of America

While the current state of the U.S. economy does not support a bullish narrative for banks or the stock market, the crypto market is a very different story. BTC is currently significantly negatively correlated with the S&P 500 and Nasdaq, at -0.8 and -0.78 respectively.

In March, the price of BTC rose alongside other cryptocurrencies as banks came under immense pressure, and coincidentally, BTC is now rising as well. This has caused other alternative coins to rise as well, pushing the market capitalization of the entire crypto market to $1.244 trillion.

To put this in perspective, the losses of U.S. banking institutions are translating into profits for cryptocurrency investors, suggesting that the flow of money into the space is not just influenced by the United States. However, the continued losses of banking institutions may not be the only reason for BTC's rise.