Bitcoin surges over 3% to hit $67,200, highest level since July. Here are key reasons behind the rally

Bitcoin (BTC), the world’s largest cryptocurrency by market value, surged over 3% to reach $67,200 on Wednesday, its highest level since July, driven by investor enthusiasm and political developments in the US.

“Market optimism was fueled by strong participation in Trump-backed WLFI tokens and anticipation of crypto-friendly regulations as the US presidential elections approach,” said Edul Patel, CEO of Mudrex.

“The rising inflows into Bitcoin ETFs, which have seen over $19 billion in net, also contributed to the bullish sentiment. Meanwhile, BlackRock’s positive outlook and Standard Chartered’s forecast of BTC reaching $73,000 have further boosted momentum,” Edul added.

As of 11:56 AM IST, BTC was trading 3% higher at $67,245. Ethereum (ETH), the second-largest cryptocurrency by market capitalization, gained 1%, trading at $2,619.“Bitcoin has successfully reclaimed $67,000 after robust buying activity yesterday. With critical support at $64,000, Bitcoin should consolidate at current levels this week before gunning for the next resistance at $69,000,” said Vikram Subburaj, CEO of Giottus.

Among other major cryptocurrencies, BNB rose by 1.9%, Solana by .5%, Dogecoin by 2.7%, NEAR Protocol by 2.7%, Litecoin by 7.5%, and Tron by 0.5%.Stablecoins accounted for $98 billion, or 91.68%, of the total 24-hour crypto market volume, according to CoinMarketCap. Bitcoin’s market cap increased to $1.328 trillion, with its dominance at approximately 57.45%. Bitcoin trading volume surged by 20.8% to $49.14 billion.

Ryan Lee, Chief Analyst at Bitget Research, cited several key reasons for Bitcoin’s rally beyond $67,000:

1. Positive policy impact: US presidential candidate and current Vice President Kamala Harris pledged support for a regulatory framework for digital currencies, boosting the crypto market’s performance.

2. Reduced potential selling pressure: The bankrupt Mt. Gox cryptocurrency exchange postponed the final repayment deadline to creditors by another year last week. This has alleviated concerns that the returning Bitcoin might flood the market and create excessive selling pressure.

3. Large ETF inflows: In the past 24 hours, there was a large inflow of $555 million into BTC ETFs and $17 million into ETH ETFs, reflecting optimism among Wall Street institutional investors towards crypto assets. This net capital inflow directly triggered a short-term price surge.

Additionally, historical data shows that over the past 10 years, the crypto market has seen significant gains and probabilities of increase during the 42nd, 43rd, and 44th weeks of the year. With many positive developments being released recently, the probability of an on-chain rally is high. However, caution should still be exercised regarding potential black swan risks from geopolitical issues and the U.S. presidential election.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)