When altcoins go to growth

On the morning of May 22, Bitcoin reached a new historical maximum at $ 111,726 on the Binance exchange. Experts called the reason for this movement called the institutional demand for the main cryptocurrency, noting the weakness of the rest of the cryptorrhist, while the Bitcoin price is formed at new levels, writes RBC Crypto.

Over the past day, bitcoin has grown by 3.5% to $ 110.6 thousand, according to Coinmarkecap at 12:30 Moscow time, ahead of almost 50% of other cryptocurrencies from the list of 100 largest capitalization. The overall indicator of the crypto carpet for capitalization has grown to almost $ 3.5 trillion, which is comparable to the growth of bitcoin.

But for a start of universal increase in altcoin prices (any cryptocurrencies different from bitcoin), one growth of bitcoin to historical maximums is not enough. Analyst in the Broker company Etoro Rice Hobson noted two key events necessary for the onset of altsyzon:

• The process of quantitative mitigation by the US Federal Reserve (Fed) should begin. This will allow “pour more liquidity into the system”;
• The dominance of bitcoin in crypto should reach 70%.

What drives bitcoin

Many experts agreed that the movement of Bitcoin price for new records is due to institutional demand.

This argument was also supported by Hobson, who pointed to a net inflow of capital in American exchange funds (ETFs) in May more than $ 2.8 billion, as a result of which the total assets under the control of EMITHI ETF reached more than $ 122 billion.

Exchange Traded Funds, ETFs based on bitcoin provide investors with legal access to cryptocurrency through the NASDAQ and NYSE exchanges in shares format. The issuance of new shares requires the actual delivery (purchase) of bitcoin funds. Demand from such ETF provided the cryptor of a significant influx of capital and became the driver of its growth in 2024.

“The movement of bitcoin was due to a combination of positive dynamics, growing optimism regarding the regulation of cryptocurrencies in the United States and preserved interest from institutional buyers,” said James Batterfill, head of the CoinShares cryptocurrency assets company, said for CNBC.

As another reason why Bitcoin was able to overcome a new price record, Batterfill identified the country’s credit rating by Moody’s agency.

In mid -May, the Moody’s International rating agency lowered the US credit rating from the AAA to AA1 due to the concern of the growth of the public debt. It expects that the public debt will grow to about 134% of the US GDP by 2035 compared to 98% in 2024. In the crypto community, it is believed that an increase in US public debt directly correlates with an increase in bitcoin price. Historically, since the creation of bitcoin, both indicators have had a high correlation: with an increase in US debt, the price of the main cryptocurrency is growing.

“The rally also contributed to more general macroeconomic concerns, including a recent decrease in the US credit rating by Moody’s agency. This strengthened the position of bitcoin as a hedging tool against the instability of national currencies, ”said Butterfill.

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