Bitcoin Price and Why Are Those Altcoins Rising? Here's what happened! - Kriptokoin.com

In a dramatic reversal, the price of Bitcoin (BTC) has defied recent struggles and has risen by a staggering 6.47% in the last 24 hours. This positive trend comes amid a shift in investor sentiment regarding the U.S. Central Bank's potential monetary policy adjustments.

Why did the Bitcoin price go up?

The catalyst for this rise seems to be a combination of many factors. Recent data from the U.S. Department of Labor showed that labor market conditions are strong. Jobless claims held steady at 208,000 in the week ended April 27. This, combined with an increase in the Employment Cost Index, instilled confidence in investors and led to increased belief that the Fed could adopt a more dovish stance by the end of 2024. Bitcoin rose by 6 percent after this development.

Adjustment in the M2 money supply

Adding fuel to the fire, the U.S. M2 money supply, which covers cash, savings, and short term deposits, showed its first positive adjustment since November 2022. Historically, such increases have coincided with strong performances in the cryptocurrency market, potentially heralding a rise. There is a similar trend this time.

What's more, Bitcoin's market capitalization currently stands at a healthy $1.2 trillion. Even a modest 1% allocation shift from the roughly $6 trillion currently parked in money market funds could mean a significant $60 billion funding for the cryptocurrency market. The potential for wider institutional adoption is a positive sign for Bitcoin's long term prospects.

What about ETF entries?

Data from Farside Investors highlights another rise indicator: Total net inflows into U.S. spot Bitcoin ETF have reached a staggering $11.2 billion since its launch in January. This strong investor interest underscores the growing confidence in Bitcoin as a legitimate asset class. While the overall trend is positive, it's worth noting that Grayscale GBTC experienced a net outflow on May 2. This contrasts with the broader market enthusiasm and is attributable to the specific investment strategies used by leading firms.

Apart from the Bitcoin price, other cryptos also rose

The positive sentiment has gone beyond Bitcoin, and other major cryptocurrencies have made notable gains. Ethereum (ETH) surpassed the $3,100 mark, while meme coins such as Solana (SOL), XRP, Cardano (ADA), and even Dogecoin (DOGE) and Shiba Inu (SHIB) all saw significant gains.

Looking ahead, the recent resurgence of ETF inflows seems to be a major factor behind Bitcoin's price increase. With ongoing positive economic data and a potential dovish turn from the Fed, the cryptocurrency market may be poised for a period of sustained growth. However, investors need to be careful and conduct detailed research before making any investment decisions.

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