Bitcoin Price Just Popped Over $22k – Why More Buying Could Be Coming
The cryptocurrency market has had to endure yet another prolonged bearish period, with coin prices falling for two weeks in a row as September approaches. With the traditional stock market struggling and economies still grappling with rising inflation, investor sentiment in the market is understandably shaken.
However, most large-cap coins had an impressive weekend, with Bitcoin breaking through the $22,000 mark for the first time in nearly a month. Investors are still sceptical of the current bull run, but some encouraging signs are emerging.
The Return of Bitcoin’s Biggest Whale
Perhaps the most significant and promising sign of an impending rally is the possibility of large sums of money flowing into Bitcoin very soon.
MicroStrategy, a business intelligence technology firm, announced last week that it intends to sell up to $500 million in stock, with the proceeds going toward buying Bitcoin. According to Bitcoin Treasuries, the Virginia-based firm is already the largest institutional Bitcoin investor, with $2.87 billion in Bitcoin at today’s prices.
MicroStrategy confirmed in a prospectus filed with the Securities and Exchange Commission that it had entered into an agreement with New York-based investment bank Cowen & Co. to sell $500 million in Class A common stock. Although the company didn’t specify how much it would spend on Bitcoin, its previous purchases indicate a possible nine-figure spending spree.
MicroStrategy’s entry into the market could signal more institutional inflows, which would be a huge boost for an asset that has been struggling for months.
A Falling Dollar Bolsters Bitcoin’s Hopes
The dollar is a huge indicator of a buying spree. The US dollar index, which calculates the greenback’s performance against a basket of currencies, fell by 1% on Friday, despite a rise in US stocks and futures.
Currently, cryptocurrencies are highly correlated with stocks and futures, so understandably, the market has seen gains.
This week, the dollar fell primarily due to US Consumer Price Index (CPI) data expectations. The greenback has had an impressive year in 2022, with the currency reaching a 24-year high against the Japanese yen and a 37-year high against the British Pound. With the Federal Reserve’s data still expected to show high inflation, most traders and investors appear to be consolidating their positions.
Ethereum Merge Incoming
Crypto investors should be excited about the upcoming Ethereum network upgrade. This upgrade, known as the Merge, is expected to transition the Ethereum blockchain from proof-of-work (PoW) to proof-of-stake (PoS), reducing its carbon footprint by approximately 99.9% and increasing blockchain transaction throughput.
The cryptocurrency community has reacted positively to the Merge. Many believe that it will be the catalyst for a larger increase in coin prices, with Bitcoin, as the most valuable coin, benefiting the most; already, Bitcoin price pumps back 21k.
Coin price increases typically begin with large-cap assets and work down to small-cap coins. With Etheruem expected to surge following the Merge (tentatively scheduled for September 15), Bitcoin may also rise.