Bitcoin continues its bullish rally, with buyers pushing it to new all-time highs. BTC approached the $ 70,000 resistance, but this psychological barrier hasn't been tested yet. The crypto maintains a strong upside potential, which gives us all reasons to expect a breakout from the $70,000 mark in the very near future.
Bitcoin's current rally was followed by other altcoins, which pushed the cryptocurrency market capitalization above $3 trillion for the first time. This upward momentum could have also been facilitated by comments made by the founder and CEO of Digital Currency Group Barry Silbert, who said that a big week ahead looms for the crypto industry and financial markets.
It's worth recalling that the news came out last week that Digital Currency Group was selling shares to SoftBank (OTC:SFTBY) and Alphabet (NASDAQ:GOOGL), Google's parent company. Also, the US Securities and Exchange Commission (SEC) said it would consider Grayscale's application to convert the world's biggest bitcoin fund into a spot exchange-traded fund (ETF).
The general fundamental backdrop remained unchanged, which is not bad at all because this is precisely why market participants keep finding enough reasons to keep buying BTC. First of all, Bitcoin is seen as a hedge that can protect capital during periods of higher inflation, which is happening throughout the world.
At the same time, global regulators are in no hurry to start a fierce fight against surging prices. On the contrary, they are hiking interest rates, which only drive more interest towards digital assets. Of the latest decisions, the Bank of England (BoE) said it wouldn't be making any alterations to its current monetary policy just yet. The US Federal Reserve also took a wait-and-see stance, refusing to provide the market participants with additional information on the timeline of its interest rate hike.
Last week, Congress passed a $1 trillion bipartisan infrastructure plan, a key pillar of President Biden's agenda. The bill can provoke additional inflationary pressures. It is not surprising that investors seek a worthy alternative asset to protect their funds in such conditions. Under normal conditions, the depreciation of traditional currencies amid spiraling inflation increases the demand for gold.
However, the gold value has hardly changed over the past year, while the BTC rate doubled. If we compare the return from investing in bitcoin and gold, we will see that in the current conditions, it is the cryptocurrency that proves to be the best hedge against inflation. It's only a matter of time until the first cryptocurrency hits the $100,000 mark.