Why Is Bitcoin (BTC) Rising? Bernstein Analysts Revealed Source!

world’s largest cryptocurrency Bitcoin (BTC) It managed to see over $25,000 for the first time in 8 weeks. Asset management firm Bernstein evaluated the factors behind the recent rise.

Bernstein Thinks SEC’s Actions Aren’t So Bad Triggering Bitcoin’s Rise

Bernstein analyst Gautam Chhugani said that recent regulatory actions such as those of the SEC may not be as bad as people think and could help push crypto prices up.

“Regulatory actions were originally called ‘Operation Choke Point’, leading to fears that crypto was being actively removed from the banking system in an attack on stablecoins and custody rules,” he wrote in a note on Thursday.

“As far as it looks right now, the stablecoin action against BUSD/Paxos was a more specific action against BUSD and cannot be reflected in all stablecoins like USDC (private). Overall, crypto remains more tightly controlled in the US, but it’s not a knockout.” he added.

Chhugani also noted that while US regulation tends to dominate the agenda, regulation and sentiment elsewhere in the world is more optimistic:

“While US regulations seem to be getting harder and harder, regulatory developments from Hong Kong look clearly positive with anticipated relief.

Until regulatory fears in the US subside, it wouldn’t be a surprise if the crypto market is dominated by Asia.”

According to the analyst, “short covering” may also be contributing to the bounce in cryptocurrencies.

Short covering occurs when a short seller buys back shares to close an open short position and returns borrowed shares to limit losses. This also pushes the price of the relevant security even higher.

However, the company said there is more to it than just short covering, and new purchases continue to push prices up.

“While sharp price movements are affected by the short covering, we believe that rising prices are also forcing the current crypto investor to increase his risk on every major move,” Chhugani wrote.

*Not investment advice.