Tether‘s USDT, the world’s largest stablecoin, has minted another $1 billion, raising its market capitalization to over $110 billion.
This could potentially drive Bitcoin to new all-time highs.
In the past 24 hours, Tether’s treasury minted $1 billion worth of USDT, bringing its annual total to $31 billion.
According to a May 17 post from Lookonchain, this significant minting contributed to Bitcoin’s price rise from $27,000 to $73,000.
Tether is also directly investing in Bitcoin.
The company plans to invest 15% of its net profit in Bitcoin to diversify its stablecoin’s backing assets.
As of March 31, Tether had acquired 8,888 BTC worth $618 million, making it the seventh-largest Bitcoin holder globally, per Bitinfocharts.
Currently, Tether’s wallet holds over 78,317 BTC, valued at more than $5.18 billion, one year after announcing its diversification plan.
Bitcoin’s price movements are also influenced by institutional investments in spot Bitcoin exchange-traded funds (ETFs).
According to Dune, U.S. Bitcoin ETFs have seen over $200 million in net inflows over the past two weeks.
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These institutional inflows have been crucial to Bitcoin’s current rally to new all-time highs.
By February 15, Bitcoin ETFs accounted for about 75% of new investments in Bitcoin as it crossed the $50,000 mark.
On May 16, Bitcoin’s price confirmed a breakout on the daily chart, with $65,000 acting as strong support, according to TradingView.
Crypto analyst Rekt Capital noted in a May 16 X post that Bitcoin had turned its old resistance into support on the monthly chart, indicating a bullish trend.
However, Bitcoin might still experience a temporary correction to below $63,500 before reclaiming the $70,000 psychological mark.
ScorehoodAI’s prediction algorithm suggested a pullback to around $63,000-$63,500, calling it a healthy correction to liquidate high-leveraged positions.
A drop below $63,500 would liquidate over $1.76 billion in leveraged long positions, and under $63,000, liquidations would reach $1.87 billion, according to Coinglass data.
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Bitcoin hovered around $66,000 on May 16 after U.S. macroeconomic data triggered a surge in risk assets.
Data from Cointelegraph Markets Pro and TradingView tracked Bitcoin’s price movement as bulls tried to solidify a 7.5% gain from the previous day.
This rise followed the April Consumer Price Index (CPI) report, which slightly exceeded expectations and sparked hopes for looser financial conditions for crypto and other risk assets.
However, some reactions were cautious. Market analysts pointed to a rapid increase in open interest as a potential sign that Bitcoin’s price movement might not be sustainable.
Popular trader Credible Crypto commented on the post-CPI environment, saying it was what “we don’t want to see on a rise” in Bitcoin’s price.
He added, “The 62-63k region is key- if we are going to avoid 59-60k we should hold there. Lose that and we go straight back to 59-60k.
“Not sure which of the two scenarios we will get atm so preparing for both.”
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Another trader, Daan Crypto Trades, highlighted significant sell orders above the spot price. “Some massive orders placed above price.
“Most of it sitting between $66K-67K, which totals to over $400M+ in orders,” he noted on May 15.
“If price starts eating into these, it often ends up with a quick fill of most of orders.”
Data from CoinGlass indicated that most potential short liquidations were concentrated around $67,000.
Despite these cautious views, some traders remained optimistic.
Veteran trader Peter Brandt reiterated his long-term bullish stance on Bitcoin, stating, “I have shown this chart many times in the past in slightly different iterations and it remains my preferred interpretation.”
Michaël van de Poppe, founder and CEO of MNTrading, predicted a steady upward period for Bitcoin, potentially boosting altcoins.
“Clearly, Bitcoin has held range low strongly at $60.5K.
“The breakout upwards took place, through which a calm, upwards period seems inevitable,” he concluded.
“This period is where I think Altcoins will start to accelerate, as confidence comes back into the markets.”
QCP Capital, in a market update to Telegram subscribers, anticipated Bitcoin returning to new all-time highs.
“We expect bullish momentum here that could take us back to the highs of 74k,” they stated, noting factors like significant sovereign and institutional adoption, easing inflation, and upcoming U.S. elections aligning for a breakout.
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In the past week, over 600 companies have disclosed substantial investments in spot Bitcoin exchange-traded funds (ETFs) through their 13F filings with the United States Securities and Exchange Commission (SEC).
These filings reveal that professional investment firms hold $3.5 billion worth of Bitcoin ETFs.
Notable investors include Morgan Stanley, JPMorgan, Wells Fargo, UBS, BNP Paribas, the Royal Bank of Canada, and hedge funds such as Millennium Management and Schonfeld Strategic Advisors.
Millennium Management is the largest investor in Bitcoin ETFs, with $1.9 billion allocated.
This includes $844.2 million in BlackRock’s iShares Bitcoin Trust (IBIT), $806.7 million in Fidelity’s Wise Origin Bitcoin Fund (FBTC), $202 million in the Grayscale Bitcoin Trust (GBTC), $45 million in the ARK 21Shares Bitcoin ETF (ARKB), and $44.7 million in the Bitwise Bitcoin ETF (BITB).
Schonfeld Strategic Advisors, managing $13 billion in assets, is the second-largest investor in spot Bitcoin ETFs, with $248 million in BlackRock’s ETF and $231.8 million in Fidelity’s fund, totaling $479 million.
Boothbay Fund Management, a hedge fund manager based in New York, reported $377 million in spot Bitcoin ETFs.
This includes $149.8 million in IBIT, $105.5 million in FBTC, $69.5 million in GBTC, and $52.3 million in BITB.
Pine Ridge Advisers, another New York-based firm, announced a $205.8 million investment in spot Bitcoin ETFs, divided into $83.2 million in IBIT, $93.4 million in FBTC, and $29.3 million in BITB.
Morgan Stanley disclosed a $269.9 million investment in GBTC, positioning it as one of the largest GBTC holders. Aristeia Capital, an alternative asset manager, revealed a $163.4 million investment in IBIT.
Graham Capital Management, based in Connecticut, declared a $98.8 million investment in IBIT and $3.8 million in FBTC.
CRCM disclosed a $96.6 million investment in IBIT, while Fortress Investment Group, a New York-based firm, reported a $53.6 million investment in IBIT.
Spot Bitcoin ETFs were launched in the second week of January and saw significant demand in the first three months.
Despite recent declines in inflows, hundreds of financial institutions have invested billions in spot Bitcoin ETFs.
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Since 2021, El Salvador has successfully mined 474 Bitcoin, valued at approximately $29 million, using the renewable geothermal energy harnessed from its Tecapa volcano.
The mining operation involves 300 processors and draws 1.5 megawatts from the 102 MW generated by a state-owned plant, as reported by Reuters.
El Salvador has taken significant strides in the cryptocurrency realm, especially in integrating renewable energy for Bitcoin (BTC) mining—a sector often criticized for its substantial energy consumption and reliance on fossil fuels.
This initiative places El Salvador at the forefront of sustainable BTC mining practices.
In a historic move in 2021, El Salvador became the first country to recognize Bitcoin as legal tender, on par with the U.S. dollar.
This decision was part of a broader strategy that included the development of a geothermal plant specifically for mining BTC.
Presently, El Salvador’s Bitcoin reserves amount to about 5,750 BTC, worth around $354 million.
However, the adoption of Bitcoin has not been without controversy.
Since its decision, El Salvador has faced intense criticism from global entities like the World Bank, mainly due to concerns about the implications of embracing a digital currency.
The skepticism intensified during the cryptocurrency bear market from 2022 to 2023, putting additional pressure on President Nayib Bukele’s pro-Bitcoin policies.
Despite this, Bukele reaffirmed his commitment to the cryptocurrency by promising the daily purchase of one BTC, a move that seemed to garner domestic approval as evidenced by his decisive victory in the 2024 presidential election.
The debate over Bitcoin’s environmental toll is ongoing within the broader crypto industry.
Advocacy groups like the Ripple-backed Greenpeace have been pushing for Bitcoin to transition from the energy-intensive proof-of-work (PoW) model to a more energy-efficient proof-of-stake (PoS) framework.
This environmental concern led to legislative action, such as New York becoming the first U.S. state to enact a two-year moratorium on PoW mining, signed into law by Governor Kathy Hochul on November 22, 2023.
Elon Musk, Tesla CEO, briefly considered Bitcoin as a payment method for Tesla vehicles after purchasing $1.5 billion in Bitcoin.
However, Musk rescinded this decision, citing environmental concerns associated with Bitcoin mining.
He stated that he would reconsider only if the mining process became predominantly renewable, noting that recent reports indicate over 60% of BTC mining now utilizes green energy.
Despite these developments, Musk has not confirmed the reintroduction of Bitcoin payments. Meanwhile, Tesla is currently dealing with a lawsuit alleging violations of the Clean Air Act at its Fremont factory.
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On May 15, Bitcoin soared past $64,000, coinciding with the announcement of lower-than-expected core inflation rates in the United States.
This significant increase in Bitcoin’s value occurred after the release of the Consumer Price Index (CPI) data, which reflected a positive outlook for risk assets like cryptocurrencies.
As a result, Bitcoin reached a local high of $64,700, according to data from Cointelegraph Markets Pro and TradingView.
The CPI report for April indicated a month-on-month increase of 0.3%, which was 0.1% below the anticipated figures.
This data suggested a decrease in core inflation to its lowest point since 2021, hinting at potential cuts in interest rates.
However, reactions to these statistics were mixed.
The Kobeissi Letter expressed caution, noting that while CPI inflation had decreased for the first time in three months, the Producer Price Index (PPI) had risen for the third consecutive month.
They highlighted that “The Fed will remain in wait and see mode,” acknowledging the complexities of the economic indicators.
Federal Reserve Chair Jerome Powell maintained a cautiously optimistic tone, despite mixed signals from recent economic reports.
“I wouldn’t call it hot, I’d call it mixed,” Powell remarked about the PPI data in a statement reported by Reuters.
Despite the positive CPI data, market expectations for immediate rate cuts remained low.
According to CME Group’s FedWatch Tool, the likelihood of a rate cut in June was just 3.1%, with a slightly higher expectation of 28.3% for July.
The cryptocurrency market reacted swiftly to these economic developments.
CoinGlass reported significant activity in Bitcoin exchanges, where prices surged, breaking past liquidity barriers and forming a new resistance level around $65,000.
This dynamic shift indicated a strong buy-in from market participants.
Skew, a prominent trader, commented on the situation, emphasizing the need for continued buying pressure to maintain Bitcoin’s momentum.
He suggested that for Bitcoin to lead the market confidently, it would need to surpass the $65,000 mark to restore market confidence.
In summary, Bitcoin’s price surge on May 15 was closely tied to the latest U.S. economic data, demonstrating the cryptocurrency’s sensitivity to global economic indicators and market sentiments.
The mixed economic data has left the market in a state of cautious anticipation regarding future Federal Reserve actions.
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Bitcoin‘s annual volatility has recently dipped below that of top tech stocks like Tesla, Meta, and Nvidia, positioning it closer to a more mature and stable asset class.
As of May 11, the 1-year realized volatility of Bitcoin was approximately 44.88%, which is lower than the over 50% seen in these major tech stocks.
This marks a significant shift from Bitcoin’s earlier days when its volatility exceeded 200%, reflecting the usual traits of a new asset class experiencing high capital inflows.
The decreasing volatility signifies Bitcoin’s evolution, as Fidelity Investments reports.
Notably, Bitcoin showed lower volatility compared to 33 out of approximately 500 S&P 500 index companies.
A pivotal observation made in October 2023 highlighted that “Bitcoin was actually less volatile than 92 of the S&P 500 stocks in October of 2023 when using the 90-day realized historical volatility figures.
Some of these names are also large-cap and mega-cap stocks.” This suggests a growing stability relative to significant market players.
Bitcoin’s stability trajectory mirrors that of gold in its early years, which initially faced high volatility followed by gradual stabilization.
Gold, after its decoupling from the U.S. dollar in 1971, saw its volatility soar above 80 in the 1970s, nearly double that of Bitcoin’s in April 2024.
However, as gold settled into an established asset class, its volatility lessened, paralleling Bitcoin’s current path toward integration into the broader financial landscape.
Recent comparisons further underscore Bitcoin’s maturation.
Its current volatility is around 44% at price levels above $60,000, significantly lower than the 80% noted three years prior when prices were similar.
Fidelity researcher Zack Wainwright explains the implications, stating, “Bitcoin was nearly half as volatile in 2024 at $60,000 when compared with 2021.
When putting this all together, a thesis pointing toward a growing acceptance of Bitcoin due to potential maturation begins to emerge.”
The reduction in volatility has often preceded substantial price surges, indicating an increase in investor confidence and accumulation behavior.
This pattern was observed in December 2023, when Bitcoin’s reduced volatility of about 43% was followed by a 75% price increase, driven by demand for spot Bitcoin ETFs in the U.S., which had attracted $11.68 billion by May 11.
Looking ahead, significant investment inflows are expected from major institutional players, including sovereign wealth funds and pension funds, engaging with Bitcoin ETFs.
BlackRock’s Robert Mitchnick and independent market analyst Scott Melker suggest that the growing institutional involvement, driven by Bitcoin’s newfound stability, could propel its price to between $100,000 and $150,000.
Melker emphasizes the importance of patience, noting, “The massive institutional flood of money that will drive bitcoin to all-time highs.”
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Bitcoin‘s trajectory is mirroring its post-2016 halving event, with current analyses suggesting a potential local bottom and future peaks reaching up to $350,000 in this cycle, as observed by cryptocurrency traders.
Rekt Capital, a pseudonymous crypto trader, noted in a May 11 post on X (formerly Twitter) that Bitcoin’s pattern closely follows its 2016 behavior.
“Bitcoin has repeated 2016 history perfectly, offering a downside wick below the bottom of its current re-accumulation range within a three-week window after the Halving,” Rekt Capital stated.
At this stage in the cycle, the reaccumulation range is defined as any price under $61,081. Presently, Bitcoin’s trading price slightly lags this benchmark at $60,901, based on CoinMarketCap data.
Rekt also pointed out that Bitcoin is in the last “pre-halving retrace” phase, which in 2016 led to a significant 48% price increase six months later, reaching $973 by December 30.
Despite the current prices, Timothy Peterson, founder and investment manager at Cane Island Alternative Advisors, sees a promising outlook based on the price drawdown from the all-time high (ATH) chart.
This chart tracks the decline from Bitcoin’s highest price point to its lowest within a certain period.
Peterson stated, “Based on adoption and prior drawdowns, we can guesstimate that the peak value of this cycle would be between $175,000 – $350,000 in the next 9 months.”
He anticipates the bull market concluding by January 2025.
Additionally, another indicator, the daily 100 moving average, is being closely watched by analysts.
This average, which forecasts long-term Bitcoin price trends, is calculated by summing up the last 100 days’ prices and dividing by 100.
According to Daan Crypto traders, this indicates that Bitcoin might be near its local bottom.
In their May 11 post, they drew comparisons to a similar trend observed following the approval of 11 spot Bitcoin exchange-traded funds in January.
A subsequent 32% price rise to $51,730 by February 25 supported their analysis.
Daan Crypto traders concluded with a cautious optimism: “Support until it isn’t, but bulls need to put in some work.”
This sentiment underscores the dynamic and speculative nature of Bitcoin’s market movements, hinging on both historical patterns and evolving market conditions.
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The Grayscale Bitcoin Trust (GBTC), a spot Bitcoin exchange-traded fund (ETF), experienced a brief resurgence in investment inflows in early May, following a substantial period of financial hemorrhaging since its inception.
Despite this, the fund quickly reverted to outflows within just a few days, reflecting its ongoing struggles in the highly volatile cryptocurrency market.
GBTC debuted on January 11 and suffered consistent outflows for 78 consecutive days, resulting in a total loss of over $17.5 billion.
A temporary reversal occurred in early May, with inflows recorded on May 3 and May 6, totaling $63 million and $3.9 million respectively.
This influx of investment briefly suggested a potential stabilization or renewed investor interest in the fund.
However, this trend did not sustain. By May 7 and May 9, GBTC reported outflows of $28.6 million and $43.4 million respectively, effectively negating the gains made in the previous days.
This pattern of rapid reversal is indicative of the challenges faced by GBTC, marking it as the only spot Bitcoin ETF issuer to report outflows during that period while other funds under the United States Securities and Exchange Commission (SEC) saw positive or neutral investment flows.
In contrast, other Bitcoin ETFs have fared significantly better.
For instance, BlackRock’s iShares Bitcoin Trust attracted substantial investment, totaling nearly $15.5 billion.
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Other notable funds include Fidelity’s Wise Origin Bitcoin Fund, Bitwise Bitcoin ETF, and Cathie Wood’s ARK 21Shares Bitcoin ETF, which reported net inflows of $8.1 billion, $1.7 billion, and $2.2 billion respectively.
Despite these fluctuations, the average daily loss for the Grayscale Bitcoin Trust since its launch stands at a stark $211 million.
Nonetheless, the overall Bitcoin ETF market in the U.S. has maintained a positive net balance of $11.7 billion due to robust inflows into other funds.
Adding insight into the investor demographics, Jan VanEck, CEO of VanEck, commented during the Paris Blockchain Week in April that “You’ve had some Bitcoin whales and some other institutions move some assets in, but they were already exposed to BITCOIN.”
He further noted the predominant retail investor contribution, which accounts for 90% of Bitcoin ETF inflows.
Despite this, there is an anticipation for significant institutional investments from banks and traditional firms as projected around May.
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Bitcoin‘s price recently approached the $60,000 support level as it faced the post-halving “danger zone,” causing concern among investors.
On May 10, data from Cointelegraph Markets Pro and TradingView highlighted Bitcoin’s intraday lows reaching $60,190 on Bitstamp.
The cryptocurrency experienced a sharp decline from around $63,000, sparking varied speculations about the cause of this drop.
Trader Skew, discussing the market dynamics on X (formerly Twitter), pointed out, “Monthly open has been swept again as well monthly buyers taken out.
If bulls want higher & want to break this downtrend its here imo,” indicating a critical juncture for Bitcoin bulls around the $60.8K to $61K range, which he identifies as a key area for potential bullish action.
Material Indicators, a trading resource, suggested that large-volume institutional players might be influencing the market, speculating, “that some institutional entity may not want to see Bitcoin breakout over the weekend while the BTC ETF market is closed,” reflecting concerns over market manipulation during off-hours.
An analysis of the order book on Binance showed a new sell block around $62,500, which was predicted to possibly adjust post-weekly close.
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Material Indicators further speculated, “I won’t be the least bit surprised if this sell wall moves lower to push price down.
“I also won’t be surprised if we see a roof pull after the W candle closes on Sunday,” suggesting potential strategic moves in the market.
Rekt Capital, a popular trader and analyst, updated his views on Bitcoin’s behavior post-halving.
He noted that the typical price drop following a halving event was nearing its end, marking a close to the “danger zone.”
He recalled his prediction from the end of April about a significant downturn, which materialized as Bitcoin fell to two-month lows at $56,500.
Reflecting on the market’s response, he concluded, “Bitcoin indeed downside wicked below the Re-Accumulation Range Low just like in 2016.
Thus price-wise, the Post-Halving ‘Danger Zone’ purple has been satisfied,” yet he also noted, “Time-wise however, the ‘Danger Zone’ officially ends in 2 days.”
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JPMorgan Chase, a major financial institution based in the United States, has recently revealed its investment stakes in several Bitcoin exchange-traded funds (ETFs) and other related assets.
According to a filing with the U.S. Securities and Exchange Commission (SEC) dated May 10, the bank disclosed its holdings in a variety of Bitcoin-related funds, including approximately $760,000 in shares distributed across the ProShares Bitcoin Strategy ETF, BlackRock’s iShares Bitcoin Trust, Fidelity’s Wise Origin Bitcoin Fund, Grayscale Bitcoin Trust, and the Bitwise Bitcoin ETF.
Additionally, JPMorgan Chase reported owning 25,021 shares, valued at about $47,000, in Bitcoin Depot, which operates a network of crypto ATMs.
This announcement came concurrently with reports from other major financial players like Wells Fargo and Susquehanna International Group, indicating a growing trend of institutional investments in cryptocurrency vehicles.
Wells Fargo’s filing revealed investments similar to those of JPMorgan, with stakes in Grayscale and ProShares Bitcoin ETFs, as well as Bitcoin Depot.
On May 7, Susquehanna International Group disclosed a significant investment exceeding $1 billion in various spot crypto ETFs, underscoring the increasing interest from financial institutions in cryptocurrency investments.
The regulatory landscape for these investments has been evolving.
Earlier this year, the SEC approved the listing and trading of spot Bitcoin ETFs on U.S. exchanges, a landmark decision for the cryptocurrency market.
This regulatory approval has opened the doors for more institutional investors to consider cryptocurrency assets as part of their investment portfolios.
Furthermore, the SEC is anticipated to make a decision by May 23 on an application from asset manager VanEck for spot Ether ETFs, potentially expanding the options available for institutional investors.
JPMorgan Chase is currently the largest U.S. bank by assets, managing approximately $2.6 trillion.
The SEC, however, has cautioned observers not to assume that the information disclosed by JPMorgan Chase regarding its crypto investments is both “accurate and complete,” suggesting that stakeholders should interpret these disclosures with caution.
This stance reflects the ongoing scrutiny and regulatory challenges associated with cryptocurrency investments, even as they gain mainstream acceptance among institutional investors.
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