Bitcoin’s bottom may be in – but don’t get your hopes up: It may struggle to climb any time soon, according to an investment firm.
On Friday, a report from the European asset management firm CoinShares said that investors last week threw new money into Bitcoin – and other cryptocurrencies – trading, indicating a change in sentiment.
But some factors could keep financial markets from going higher, James Butterfill, head of research at CoinShares, he wrote.
“We have said for some time that Bitcoin has either reached, or is close to, bottoming out,” the report read. “But we don’t see much potential from here.”
The report added that current economic headwinds, such as the US bombing of Iran and rising oil prices, could see inflation rise again.
The price of Bitcoin rose earlier this week, hitting a seven-day high of $65,501 on news that inflation in the US was lower than expected. It has since he wiped out the gains and was recently selling for $64,010.
Bitcoin’s price has done well on the news that inflation is falling as investors expect interest rates to drop. But Butterfill said “cutting rates doesn’t seem likely at this point.”
Bitcoin’s worst run on record
CoinShares data showed that investors pulled $8 billion from funds that give crypto exposure — “the worst ever.”
However, last week, things changed when $287 million hit the crypto currency, CoinShares said, and the data so far shows that this week seems to be another positive trend.
The price of Bitcoin has improved as US investors – who were previously excluded from investing in cryptocurrencies – bought shares in the currency for sale in 2024.
The exchange — run by the likes of BlackRock, Fidelity, and Grayscale — allows traditional investors or Wall Street institutions to buy positions in Bitcoin through shares traded on the market.
Since October BTC’s all-time high of $126,080, the crypto market has been hit hard as investors quickly pulled out of the coin. Bitcoin has struggled to make gains, especially after the US and Israel began bombing Iran, which sent oil prices soaring.
The leading cryptocurrency is now about 50% below its record.
“The big picture is that the current setup is creating interest in increasing positions, but caution remains as sentiment remains negative,” CoinShares added.
