It’s been a hazy start to the year for bitcoin, but here comes the sun. After shedding $119 billion-plus from its market cap in Q1 amid pressure from regulators and the cold shoulder from advertising platforms, the bitcoin price is ready for a rebound. And it appears the stars are beginning to align for that to happen in the second quarter. CNBC’s Brian Kelly outlined the drivers of the bitcoin price for the new quarter, and we’ve added to them.
April 15 marks the end of tax season in the United States, and it’s just around the corner. Investors who profited from bitcoin’s massive rally in December are having to come up with the money to pay Uncle Sam now, which could explain a percentage of the selling pressure in the bitcoin price in March. Kelly noted that any “tax-related selling” that’s been happening in March is going to come to an end in a little more than a week. (Separately, Kelly also noted that the blockbuster $2 billion Telegram ICO may have attracted investments away from BTC.)
As CCN previously reported, Japan’s Coincheck may be on the block. Not only is it for sale but the potential buyer, online brokerage Monex Group, is the parent company of US-based TradeStation (with massive data and charting capabilities) and is publicly traded.
“It’s a massive confidence boost; you now have a regulated public company in Japan buying into a crypto exchange,” Brian Kelly, CEO of BK Capital Management, told CNBC.
Kelly added that “massive, massive sentiment shift.”
Unless you were looking to buy the dip, March was difficult to watch for bitcoin investors. But even though the bitcoin price suffered, the performance only proves that history repeats itself. March is historically a dismal month for the leading cryptocurrency, “rising only one of the last seven years [in 2013],” as per Fundstrat data.
That’s good news for April because historically, this is one of the best trading months for the bitcoin price, “rising five of the last seven years,” Fundstrat says.
The forces for bitcoin are stronger than the forces against it. While these three drivers of the bitcoin price appear imminent, there could be others. For instance, major bitcoin markets around the world including the United States are awaiting a regulatory framework to take shape to take the uncertainty out of the equation, among other reasons. It could be the catalyst the cryptocurrency markets need to bring them over the top.
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Last modified: May 20, 2020 8:53 PM UTC