The cryptocurrency market is buzzing with renewed optimism, especially regarding Bitcoin. Despite known volatility, experts predict stability for the leading cryptocurrency in the short term due to rising institutional demand.
Increasing Institutional Demand for Bitcoin
According to Matt Mena, a crypto strategist at 21Shares, a sharp short-term decline in Bitcoin's price is unlikely. The main factor for its resilience is the increasing institutional demand. Unlike the past when Bitcoin was primarily viewed as a retail-driven asset, it is now being bolstered by major financial institutions and corporations.
The Impact of ETFs on the Crypto Market
The launch of spot Bitcoin ETFs in the US has been a significant event, opening up cryptocurrency investments to traditional investors. These funds have already absorbed more Bitcoin than anticipated to be mined this year, reducing the available supply in the market and supporting prices.
External Risks to Bitcoin and Their Impact
Despite the positive internal dynamics, there are external risks. Mena notes that potential tariff policies from former U.S. President Donald Trump could introduce economic uncertainty. Additionally, delays in Federal Reserve interest rate cuts may negatively impact Bitcoin prices.
Thus, the growing institutional demand and the impact of spot ETFs create a strong foundation for Bitcoin. However, it is crucial to be aware that macroeconomic factors may introduce volatility and affect the market.
