Bitcoin Market Cap Back Above $1 Trillion, Where Next?
The Bitcoin Market Cap is back above a trillion dollars for the second time, its highest level since losing its status in late February.
Institutional demand for Bitcoin is clearly growing, and with Canada recently launching 3 Bitcoin ETFs, it seems there is room for bullish optimism.
And with the market cap back above a trillion dollars, which way is the Bitcoin market cap heading next?
How Bitcoin Reclaimed $1 Trillion
After dropping from its lofty $1 trillion status last month, the Bitcoin market cap is back above the significant milestone just over two weeks later.
The Bitcoin price has struggled since then and dropped to a local low of $43k on February 28th. Since then, the price breached $50k but quickly dropped again, and struggled to break the $50k resistance.
The price finally took $50k yesterday and has since risen to a local high of $55,585 earlier today. But which way is Bitcoin headed next and what will help it on the next leg up?
Institutional Demand For Bitcoin Showing No Signs of Faltering
Institutional demand for Bitcoin is as strong as ever and current sentiment appears to be very bullish, as CEOs and CIOs rush to add it to their balance sheets.
And now that Bitcoin is back above $1 trillion, it will generate more interest from institutional investors and traders.
Last week, institutional banking giant Goldman Sachs announced it was restarting its crypto trading desk, because of the demand from institutional investors.
Goldman’s global head of digital assets Matt McDermott said the decision was taken because unlike 2017, there was now ‘huge institutional demand across different industry types and from private banking clients.’
Citigroup and JPMorgan have both recently been making bullish moves into the Bitcoin space. Citigroup released a 108-page bullish report on Bitcoin, saying Bitcoin’s ‘focus on global reach and neutrality could see it become an international trade currency.’
Further, it’s understood that JPMorgan held a town hall meeting for thousands of JPMorgan Chase traders and sales personnel earlier this year, with Bitcoin taking up much of the time.
And with MicroStrategy continuing to add to its Bitcoin allocation with another $10 million investment, it’s clear the corporate demand for Bitcoin is showing no signs of slowing down.
Stimulus Package Offers Fuel For Bitcoin’s Fire
Is it a coincidence that news of the stimulus package being passed and the Bitcoin price surging past $50k again? I think not.
Since the pandemic, the Federal Reserve has injected more than $9 trillion dollars into emergency repo operations. Coupled with the $2.2 trillion pandemic response package, and now President Biden’s $1.9 trillion stimulus package, the U.S. has printed much more than 20% of its entire currency into circulation in the past year alone.
The Bitcoin Market Cap Heading North?
Which way will the Bitcoin market cap go next? Short term it’s hard to say, but things are seeming more bullish after the recent cool off.
After breaking resistance, the Bitcoin market cap is now back above $1 trillion, and it appears that we could be heading higher.
Institutional demand for Bitcoin is likely to gain pace, especially if the price continues to rise. And with the Federal Reserve printing more stimulus checks, anyone with an understanding of economics knows not to keep wealth in the US dollar.
This is what triggered MicroStrategy CEO Michael Saylor to take action, and it’s without question that many other CEOs are discussing their options.
Printing “free” money only has one effect down the line, and this makes a stronger investment case for Bitcoin as a hedge against inflation. and I expect it to push the Bitcoin market cap up to even higher highs.