As of late July 13, bitcoin was higher by about 4.5% over the previous seven days. Experienced crypto investors know the largest digital currency has experienced larger declines and gains over weekly stretches numerous times. So, there isn’t anything too alarming about the aforementioned period.
Some market observers argue that some summertime lethargy could actually be a positive for bitcoin. If that scenario plays out and bitcoin steadies without significant retrenchment, exchange traded funds such as the Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC).
Those crypto-adjacent ETFs are already on torrid paces this year. Resurgent crypto prices have helped. More recently, so has intensifying speculation that the SEC may be warming to the idea of approving spot bitcoin ETFs.
For investors considering BLKC, SATO, or bitcoin itself, the cryptocurrency’s recent steadiness amid some economic data reports could be encouraging.
Potential Encouraging Bitcoin Steadiness
“Bitcoin was very choppy around the inflation release yesterday but ultimately it’s had little sustainable impact on the price,” wrote Oanda analyst Craig Erlam in a Thursday note. “It’s settled a little lower after some big fluctuations but is still well within the $30,000-$31,000 range it has broadly traded in for the last few weeks. That consolidation will probably come more as comfort to crypto bulls but at this stage, it isn’t particularly clear in which direction it will break next. That may depend on the news flow in the coming weeks, with some positive news on the ETF front potentially giving the crypto space another boost.”
Cooling inflation could be a positive for bitcoin. It could imply the Federal Reserve can take a breather from interest rate increases. Many considered such increases a culprit behind the crypto winter of 2022. That weakness contributed to price erosion in crypto equities, including some of the names residing in BLKC and SATO.
There are other reasons why some consolidation and tight trading ranges in bitcoin could prove positive for BLKC and SATO. Prior instances of those conditions often gave way to upside.
“Bitcoin is currently consolidating below the 2021-22 cycle mid-point of $30,000, with several metrics reaching a level of equilibrium and balance. This is synonymous with the ‘re-accumulation period’ seen in past cycles, characterized as several months with little macro direction,” according to crypto research firm Glassnode.
VettaFi LLC (“VettaFi”) is the index provider for BLKC & SATO, for which it receives an index licensing fee. However, BLKC & SATO are not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing or trading of BLKC & SATO.
For more news, information, and analysis, visit the Crypto Channel.
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