Bitcoin (BTC) experienced a significant price adjustment early Tuesday as it briefly dipped below the $66,000 price level.
This occurred after attempts to surpass the $70,000 mark on Monday failed. As of writing, Bitcoin recovered slightly, stabilizing at approximately $66,700.
Bitcoin’s Price Shows Correction Despite Various Bullish Factors
This price fluctuation coincided with notable inflows into spot Bitcoin exchange-traded funds (ETFs). On Monday, these funds saw an influx totaling $124.13 million. Among them, BlackRock’s iShares Bitcoin Trust (IBIT) stood out with an inflow of $205.62 million, marking the highest among its peers.
In contrast, other major funds, such as the Grayscale Bitcoin Trust and Bitwise Bitcoin ETF, experienced outflows, which added to the market’s uncertainty.
“It is not surprising that the recent inflows into BlackRock’s IBIT are making no difference to the price of BTC. With Bitcoin ETF marking the biggest lever for Bitcoin, the outflow from rivals like Grayscale’s GBTC is negating the impact of the BlackRock inflow. Following heightened expectations, the market volatility might not subside in the short term as the Mt.Gox BTC repayment is adding to the negative sentiment,” Alvin Kan, Bitget Wallet COO, told BeInCrypto.
Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach
The recent volatility in Bitcoin’s price can largely be traced back to actions by the US government. Authorities moved about 28,000 Bitcoin from the Silk Road confiscated Funds to new addresses, involving assets valued at roughly $2 billion.
This sparked widespread speculation within the crypto community about possible government sell-offs. Despite these short-term fears, the long-term perspective on Bitcoin remains optimistic.
“Bitcoin is resilient, and its long-term growth potential cannot be understated. With many Wall Street managers speaking favorably of Bitcoin the adoption curve is bound to grow. Additionally, the market might benefit from a potential rate cut in September and the accompanying dollar liquidity,” Kan added.
During this turbulent period, Senator Cynthia Lummis has reaffirmed her stance on leveraging Bitcoin to address the US’s financial challenges.
“Today, the national debt has passed a staggering $35 trillion. A strategic Bitcoin reserve could stop this runaway train and help pay down the national debt for our future generations,” Lummis said.
Over the past weekend, the Wyoming Republican announced her intention to introduce a bill aimed at establishing a “Bitcoin strategic reserve.” This reserve would aim to accumulate about 1 million BTC, representing 5% of the global supply. The goal is to utilize this reserve to help mitigate the national debt, which has now surpassed $35 trillion.
Moreover, the idea of a national Bitcoin reserve has garnered support from other notable figures, including Independent candidate Robert F. Kennedy, Jr. He proposed an even more ambitious plan for a reserve of 4 million Bitcoin.
Read more: Who Owns the Most Bitcoin in 2024?
Hence, in an interview with BeInCrypto, Catherine Chen, Head of VIP & Institutional at Binance, shared that the discussion around a US national Bitcoin reserve is meaningful and positive for the crypto market.
“It is a positive sign for the digital assets market that Bitcoin is being cited more frequently and is becoming a significant topic of discussion. Robert Francis Kennedy Jr’s pledge to create a strategic Bitcoin reserve that matches the US gold reserves level solidifies Bitcoin’s utility as digital gold,” Chen told BeInCrypto.
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