“This wk markets come back to life as the head of the Fed says crypto will not be banned in the US”— Paul Ebeling
Note: The Bitcoin network continues to rise and a short squeeze accelerates the price rise.
The Digital asset markets reversed to Bullish as we began Q-4 of Y 2021. The largest and oldest crypto Bitcoin (BTC) ended the week up a healthy 13%. The 2nd and 3rd largest assets Ethereum (ETH), and Binance Coin (BNB), also had a wk of double-digit gains and are up 14%, and 24%, respectively.
This new Bullishness in the crypto markets was spear headed by a statement from Fed Chairman Powell when he said he has “no intention” to ban Bitcoin and cryptocurrencies during a financial services committee meeting Thursday.
Mr. Powell’s comments to the Senate banking committee have been interpreted favorably by the market, as he does not intend to take a draconian approach to Bitcoin and crypto regulation, reassuring investors that it is safe to reenter the digital asset markets.
Earlier in the wk, Gary Gensler, Chairman of the SEC hinted that he is open to ETFs for Bitcoin futures saying he looked forward to his staff reviewing a “number of open-end mutual funds launched that invested in Chicago Mercantile Exchange (CME)-traded Bitcoin [BTC] futures.” The filings use the Investment Advisers Act of 1940, which Gensler says “provides significant investor protections for mutual funds and ETFs.”
Bitcoin markets were also boosted by a short squeeze. Short squeezes happen when short traders are forced to close their positions at a loss due to a sudden price increase. These traders are forced to cover these positions quickly before the price goes even higher. If enough shorts are caught in this position, then the squeeze can have a tangible effect on price.
Have a prosperous week, Keep the Faith!