Bitcoin Breaks $85k Barrier as Institutional Demand Gains Momentum
Bitcoin surged past $85,000 on Monday, marking its highest level in eight months. The world's largest cryptocurrency rose by 5% to reach $85,200 before retreating slightly to $84,473, according to CoinMarketCap data.
Naeem Aslam, chief investment officer at Zaye Capital Markets, attributed the rise to stronger inflows into exchange-traded funds (ETFs), regulatory factors, and a sharp closure of bearish positions. He noted that institutional demand is now partly absorbing pressure from higher interest rates, which had previously weighed on Bitcoin.
Aslam's assessment also highlighted the impact of regulatory uncertainty on the cryptocurrency market. The Senate's blockage of the Clarity Act initiative, intended to create a clear framework for cryptocurrencies in the US, contributed to the decline last week. Carsten Menke of Julius Baer observed that without this act, the US crypto market will continue to operate under a combination of existing rules, regulations, court decisions, and the adopted Genius Act on stablecoins.
Improved market sentiment was also supported by expectations of talks between US President Donald Trump and Chinese President Xi Jinping. However, Aslam warned that tensions surrounding Iran and sanctions could increase volatility and strengthen investors' defensive sentiment.