Bitcoin rose by $79,000 on Friday, and the market was not driven by a single factor. The rise in institutional buy-backs, macro-environment changes in the United States, and the release of more friendly signals from Washington to the encryption industry, combined with large-scale headbacks, have magnified the increase.

ETF Reflow of Funds

The recovery in demand was one of the most direct underpinnings of the increase. The report quoted market sources as saying that United States spot bitcoin ETF recorded about $517 million in net inflows on 19 August and about $606 million in net inflows on 20 August, amounting to over $1 billion in both days.

Earlier this month, such funds also attracted about $853.5 million in inflows over five consecutive trading days. The continued return of funds is an indication of the increased willingness of institutional investors to allocate their coins.

  • Net inflows at 19 August were about $517 million
  • Net inflows on 20 August were about $606 million
  • Total net inflows of over $1 billion over two days

Washington is sending out a more friendly signal.

In addition to the financial aspects, United States policy is expected to improve. During this week's meeting with encryption and finance executives in the White House, Trump called on Congress to promote the adoption of a more “fair” Clarity Act. The bill was intended to establish a federal regulatory framework for digital assets and to delineate the regulatory responsibilities of the United States Commodity Futures Exchange Commission and the Securities Exchange Commission.

At the same time, however, the report notes that the direct impact of the bill on the Bitcoin itself may be limited. The reason for this is that Bitcoin ' s regulatory attributes in the United States are relatively clear and are generally considered as commodities, that spot ETFs have also landed and institutional participation channels already exist. By contrast, the Bill, if advanced, could have a greater impact on other encrypted assets.

In addition, Michael S. Selig, Chairman of the United States Commission for Commodity Futures Trading, indicated on Thursday that agency staff had been asked to study the rules for the advancement of encrypted market structures under existing authority. The market sees this as one of the signs of reduced regulatory risk.

I'm not sure.

After the recovery of the spot purchaser and the expected improvement in policy, the traders who were betting on the drop in bitcoin were quickly under pressure. The report refers to analysts' estimates that the cumulative amount of space in the encrypted market has been over $4 billion over the past two to three days, one of which was approximately $2.7 billion within 24 hours and another $1.2 billion the following day.

Of this, the size of the flat in the initial round of squeezes alone was approximately $2.75 billion. Large-scale reactive replenishments further push up prices and attract upturns to re-enter the field, creating a situation in which increases and silos reinforce each other.

Marketers also mentioned the weakening of the United States dollar and renewed attention to assets such as gold and bitcoin, following the expansion of the United States Treasury ' s long-term bond buy-back programme. This macro background provides additional support for the upturn in risk in this round.