Bitcoin has been stuck in a trading range between $5800 and $6700 for over a month. In the past few days, it broke above the $6700 level and past $7000. At the time of the writing, it is trading at $8200.
What was the catalyst for this move?
Most likely a combination of favorable events has allowed the price to break past its resistance. Talk of a Bitcoin ETF which has been proposed and is still awaiting a decision by the SEC would have a more substantial impact than when Bitcoin Futures were introduced. The ETF would also give access to many more investors. The SEC will decide on the Direxion ETF sometime in September.
More Regulatory Certainty
The recent move in Bitcoin price is more likely to be the fact that we see what the regulatory landscape will look like and it isn’t as bad as many predicted. Last weekend the G20 met and issued a statement saying that cryptocurrencies do not pose a financial stability risk at the moment. Fears of drastic regulatory moves like we saw in China were one of the reasons for the drop in prices. Cryptocurrency Exchanges like Binance have established themselves in a regulatory jurisdiction like Malta which recently passed crypto friendly legislation. Binance is also looking to establish itself in South Korea. One of the hottest cryptocurrency markets.
More Clarity in the US
Coinbase recently purchased a broker-dealer and a Registered Investment Advisor. This would signal that the largest US-based crypto broker will be in a position to issue ICOs. It also appears that the SEC has been informally directing Coinbase on how to position themselves from a regulatory perspective.
With some of the first regulatory hurdles now cleared Bitcoin and Cryptocurrencies should continue to climb. Greater access will lead to a greater implementation and acceptance of the technology.