Bitcoin Price Stable Amid Regulatory Boost, ETF Inflows

Bitcoin experienced a tumultuous week, with its price fluctuating due to various factors, including regulatory developments and market sentiment. The price of Bitcoin remained relatively stagnant, hovering around $84,150 per coin. This stability came despite a rebound in global M2 money supply, which some analysts suggested could reignite Bitcoin's bullish momentum. However, the actual impact of this rebound on Bitcoin's price remains to be seen.

The regulatory landscape for Bitcoin also saw some developments this week. The Securities and Exchange Commission (SEC) gave the green light to certain mining operations, which could potentially boost the mining industry and increase the supply of Bitcoin. This regulatory approval is seen as a positive step for the industry, as it provides more clarity and legitimacy to mining operations. The SEC stated that proof-of-work mining operations do not need to register their actions as they "do not involve the offer and sale of securities." This decision aligns with a more relaxed approach to the digital asset industry under the current administration, which has already scrapped a number of lawsuits and investigations targeting firms in the space.

In addition to regulatory developments, Bitcoin ETFs saw a significant influx of capital, attracting over half a billion dollars by Wednesday. This influx of capital is a positive sign for the market, as it indicates growing institutional interest in Bitcoin. The ETF inflows have been positive for four consecutive days, signaling a potential recovery for Bitcoin amid macroeconomic uncertainty. The price of Bitcoin rebounded by 0.2% on the day, further supporting the notion of a potential recovery. However, the positive sentiment hasn't extended to all crypto ETFs, as Ethereum funds are collectively nursing a now 13-day losing streak.

Despite the volatility, some market observers believe that Bitcoin has reached its floor price and may be set for a rebound. The price of Bitcoin has rallied within a tight range, from a low of $81,300 to a high of $87,320. The shift in regulation and the backing of Bitcoin by key figures have created a tailwind for the coin's proponents. Several government agencies have also shifted their policies in favor of Bitcoin, which could attract long-term investors.

However, investors could still be in for a bumpy ride as data shows that Bitcoin's volatility is at a six-month high due to worries about the U.S. economy and geopolitical tensions pushing people to adopt a more "risk-off" mindset. The asset jumped briefly after Federal Reserve Chair Jerome Powell told reporters that everything was under control and that President Trump's tariffs would have a "transitory" effect on inflation. Bitcoin had been dipping—just like stocks—whenever President Trump abruptly announced tariffs over the past month. But investors seemed to like the news from Powell.

Meanwhile, BlackRock—the world's biggest asset manager—has tried to clear the air about Bitcoin. In an interview, the firm's Digital Asset Head Robert Mitchnick said that calling the biggest cryptocurrency by market cap a "risk-on" asset was not exactly accurate. "What we've seen lately seems to be self-fulfilling and actually a self-inflicted wound by some of the research and commentary that the industry does, leaning into this idea of it as a risk-on asset at times," Mitchnick said. BlackRock's iShares Bitcoin Trust has been one of the most successful BTC ETFs since its launch last January.