Bitcoin retraces more than half of its Wednesday loss as declines in U.S. treasury yields and Blacrock’s bitcoin ETF submission improved market sentiments. Blachrock’s effort to double down on providing their clients with crypto products is a welcoming development as the industry has been hit by the SEC’s aggressive regulatory approach recently. However, the price of bitcoin failed to fully recover the post FOMC loss and is still struggling to recover $26k. Bitcoin’s steady decline for the past couple of weeks may not be entirely due to macro and regulatory headwinds. Bitcoin miners have already sent more than 7.3k BTC to crypto exchanges, a level not seen since October 2021 according to Glassnode. It indicates that miners’ profitability from bitcoin’s block reward may be declining due to the decline in the coin’s price and rising mining difficulty, and they are slowly offloading their bitcoin holdings, thereby limiting bitcoin’s upward potential in the process.
Bitcoin has become a macro asset in recent years and it requires lower treasury yields and weaker dollar to overturn the current underlying trend. These conditions require more clarity on the timing of Fed’s policy pivot, which, in turn, requires more clear signs of slowing inflation and labor market activity.