Bitcoin soars to $71,000 with a 6% rise, driven by strong institutional investments in crypto from firms like Morgan Stanley and JPMorgan.

Bitcoin experienced a significant surge on May 21, rising by 6% to trade around $71,000. This rally is primarily attributed to factors driving investor sentiment and market dynamics. Over the past seven days, Bitcoin has been up nearly 15%, reflecting growing institutional interest and positive market sentiment.

Ethereum (ETH) has also seen impressive gains, currently trading near $3,800. ETH has surged 22% on May 21 and over 30% in the past week. This strong performance is driven by anticipation of Ethereum ETF approvals and increased adoption in decentralized finance (DeFi) applications.

The broader cryptocurrency market has followed suit, with notable altcoins also posting significant gains. Let’s delve deeper and uncover the reasons behind the surge.

Altcoins Following Bitcoin’s Lead

Bitcoin’s surge has positively influenced several altcoins, leading to notable price increases in the last 24 hours. Pepe (PEPE) is now priced at $0.00001231, reflecting a remarkable 22% rise. Lido DAO (LDO) has also experienced substantial growth, with its price up over 30% during the last week.

Similarly, Bonk (BONK) trades at $0.00003175, marking a 31% weekly increase. Uniswap (UNI) has seen a 36% weekly gain. Lastly, Arbitrum (ARB) has climbed nearly 23% a week. These impressive gains demonstrate the strong market sentiment and the ripple effect of Bitcoin’s recent performance on the broader cryptocurrency market.

Bitcoin ETF Inflows Surge

The recent surge in Bitcoin, rising by 6% to around $71,000, is significantly driven by renewed interest from major institutional investors. Firms such as Morgan Stanley and JPMorgan have increased their Bitcoin holdings, which has greatly bolstered market confidence. H.C. Wainwright reports that hedge funds, pension funds, and banks have significantly invested in these funds following their highly anticipated launch.

A tweet from @crypto_whale highlights, “Morgan Stanley doubles down on Bitcoin, increasing their holdings by 25% this quarter. Institutional confidence is at an all-time high!”

🚨 BREAKING: 13Fs for Q1 2024 are in! 🚀
1,028 firms with $100M+ own #Bitcoin holding a staggering $10.9B 💰
Institutions are piling in! Shrimps too 🏦 Millennium, SIG, Horizon Kinetics, Morgan Stanley & more! 🙌
Wave 2 incoming #Bitcoin revolution! 🌎🔥 https://t.co/IgK1IoYA7S pic.twitter.com/PL1oGfc9Ck

— InvestAnswers (@invest_answers) May 16, 2024

As of March 31, Morgan Stanley (NYSE:MS) owned $270 million of Grayscale Bitcoin Trust (BTC) (NYSE:GBTC), according to a 13F filing.

Other major banks like JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), and UBS disclosed holdings in spot Bitcoin ETFs during the first quarter.

These filings suggest nearly $1 billion in net inflows into spot BTC ETFs last week, reversing $500 million in net outflows from the previous eight weeks. Year-to-date net flows have exceeded $12 billion.

Key Points:

• 563 professional investment firms reported owning $3.5 billion in BTC ETFs.
• 60% of these holders were investment advisors; 25% were hedge funds.

The significant inflows underscore growing institutional confidence in Bitcoin ETFs, driving substantial market activity.

Bitcoin and Ethereum Price Movements Amid ETF News

Bitcoin isn’t the only cryptocurrency attracting significant investments. Solana, Chainlink, and Cardano have also seen increased interest. Ethereum faced outflows totaling $23 million due to concerns over ETF approval, and investments in blockchain-related stocks also encountered challenges with outflows.

Geographically, the United States led with $1.002 billion in inflows, largely driven by positive developments at Grayscale. Conversely, Switzerland and Germany saw modest gains, while Hong Kong and Canada experienced outflows.

Key Points:

• Bitcoin: Significant inflows of $942 million, reflecting growing confidence and interest in BTC.
• Ethereum: Price surged over 16% as ETF approval odds increased to 75%.
• Outflows: Ethereum faced $23 million in outflows, and blockchain-related stocks struggled.

Last week’s unexpected US CPI report has positively impacted digital asset investments, particularly Bitcoin. The surge in investment indicates a growing interest and confidence in BTC, highlighted by the $942 million inflow into Bitcoin products.

Meanwhile, Bloomberg analysts have increased the likelihood of spot Ethereum ETF approval to 75%, citing potential political pressure on the SEC. However, Grayscale’s CEO stepping down adds complexity ahead of the SEC’s decisions on VanEck’s and Ark 21Shares’ ETF applications on May 23 and 24.

SEC decision deadline this week on spot eth ETFs…
 
SEC must approve both the 19b-4s (exchange rule changes) & S-1s (registration statements) for ETFs to launch.
 
Technically possible for SEC to approve 19b-4s & then slow play S-1s (esp given reported lack of engagement here).

— Nate Geraci (@NateGeraci) May 19, 2024

Nate Geraci explained that the SEC’s approval of 19b-4 filings could lead to eventual S-1 approvals. Despite earlier skepticism, the improved ETF approval odds suggest a positive outlook for Ethereum, which could enhance market sentiment and potentially benefit Bitcoin’s price due to the correlation between major cryptocurrencies.

Bitcoin Price Prediction

Bitcoin is currently trading at $69,874, up 0.13%. The 4-hour chart indicates several key price levels to monitor. The pivot point is at $71,914. Immediate resistance levels are $73,734, $75,480, and $76,856. Immediate support is at $68,000, followed by $66,608 and $65,949.

The technical setup suggests a potential bullish trend if Bitcoin remains above the $68,000 support level. Traders should watch for a break above $71,914 to target $73,734. However, a drop below $68,000 could lead to further declines towards $66,608.