Bitcoin price soared past the $28,400 mark during European morning hours on Tuesday, bolstered by positive sentiment and the signing of a crucial crypto law in the United States. The new legislation, signed by California Governor Gavin Newsom on Friday, is set to take effect in July 2025. The crypto licensing bill is expected to benefit crypto businesses and promote long-term industry growth.
Positive sentiment and regulatory developments support Bitcoin price
In spite of fake reports about BlackRock’s spot bitcoin ETF approval causing price volatility on Monday, bulls remained unfazed. BlackRock CEO Larry Fink, during a FOX Business interview, commented that the rally demonstrated the “pent up interest in crypto.” He also suggested that crypto could serve as a flight to quality asset.
Over the past 24 hours, bitcoin saw a 2.1% increase, extending its two-day gain streak. Meanwhile, Ether and BNB tokens remained relatively unchanged. Solana’s SOL experienced a 6% jump, leading gains among major cryptocurrencies. On the other hand, XRP and Cardano’s ADA witnessed slight losses.
Market Index and crypto investing appeal
The Market Index, a broad-based tracker of hundreds of tokens, rose by 1.24%. However, tokens of decentralized exchange Uniswap (UNI) slipped 3% after the platform introduced a 0.15% swap fee, generating mixed reactions among industry watchers.
Market analysts emphasized the allure of crypto investing, pointing out the favorable risk-reward opportunities compared to other asset classes. They observed that crypto has the best upside potential given current asset prices, with real estate and the S&P 500 trading near all-time highs.
Spot trading volumes and leverage risks
Bitfinex analysts identified market risks related to spot trading volumes hitting multi-year lows and the increasing use of leverage among traders. They warned that this situation could lead to rapid price movements and outsized liquidations, as seen on Monday.
Bitcoin price strength amid market risks
Despite the risks associated with trading volumes and leverage, Bitcoin price continues to display strength, underpinned by positive sentiment and regulatory developments. The market remains attractive to investors due to its potential for high returns compared to other assets.
Investors should closely monitor the risks related to trading volumes and leverage, as they could significantly impact the market. However, the overall outlook for the crypto market remains positive, with Bitcoin price continuing to rise and industry developments supporting long-term growth.
In conclusion, the Bitcoin price surge past the $28,400 level highlights the growing interest and confidence in the cryptocurrency market. With favorable risk-reward opportunities and the signing of a crucial crypto law in the United States, the future of the industry looks promising. As long as investors remain vigilant about the risks associated with trading volumes and leverage, the market’s potential for high returns will continue to attract new and seasoned investors alike.
