Why is the crypto market up today?

The cryptocurrency market is up today, with the total market capitalization rising by approximately 2.50% in the last 24 hours to reach $2.35 trillion on May 17. That includes gains from top-ranking coins Bitcoin (BTC) and Ether (ETH), which have risen around 2% and 4% on the same day.

Top catalysts driving the crypto market upward today include the ongoing inflows into the spot Bitcoin exchange-traded funds in the U.S. and Coinbase’s plans to expand into Australia’s $2.5 trillion pension market.

Investors returning to spot Bitcoin ETFs

The crypto market’s ongoing gains align with the resumption of inflows into the U.S.-based spot Bitcoin ETFs. As of May 16, these funds were managing around $12.40 billion worth of BTC, up from $11.18 billion at the beginning of the month.

Interestingly, the inflows appear as over 600 firms report holding Bitcoin ETFs in their portfolios.

JPMorgan, the world’s largest banking institution, has disclosed substantial holdings in various Bitcoin ETFs available in the market. The bank’s diversified investment portfolio includes Bitcoin ETFs from BlackRock, Fidelity, and Bitwise, with an investment exceeding $1 million.

Similarly, Wells Fargo, another major banking giant, recently revealed its exposure to Bitcoin ETFs in a filing with the US Securities and Exchange Commission (SEC). Wells Fargo reported owning 2,245 shares of the Grayscale Bitcoin ETF (GBTC).

These disclosures highlight the growing acceptance and adoption of Bitcoin and other cryptocurrencies in the traditional financial sector, helping the crypto market’s valuation rise today.

Lower U.S. bond yields boost risk appetite

Interestingly, the Bitcoin ETF inflows further coincide with declining U.S. bond yields, which along with the rising crypto market, suggests a rising risk appetite among investors against the prospects of generating lower returns in the Treasury market.

This trend developed primarily after the end of the U.S. Federal Reserve’s two-day Federal Open Market Committee (FOMC) meeting on May 1, during which the central bank officials clarified that they won’t raise interest rates in the near future until inflation cools down.

On May 15, the U.S. Consumer Price Index (CPI) showed a cooling inflation. Consequently, bond traders now see the first rate cut in September instead of November at the beginning of May.

Historically, prospects of lower interest rates have often aligned with bullish phases in the crypto market.

Coinbase wants to tap Australia’s $2.5T pension market

Today’s crypto market’s gains coincide with the U.S. crypto exchange Coinbase’s announcement about developing a service specifically targeting Australia’s growing self-managed pensions sector.

According to the latest data from the Australian Taxation Office, self-managed portfolios constitute about a quarter of Australia’s $2.5 trillion pension system, with A$1 billion ($664 million) already allocated to cryptocurrencies.

Coinbase’s initiative might pave the way for greater institutional involvement over time. Investors may be optimistic that this will eventually lead to broader adoption, which is helping the crypto market rally today.

Crypto market: technical rebound

From a technical perspective, the crypto market’s gains today are part of a rebound that started at a support confluence comprising the 100-day exponential moving average (100-day EMA; the purple wave) and the lower trendline of a prevailing descending triangle pattern.

Descending triangle patterns in an uptrend are considered bullish continuation patterns. They resolve when the price breaks above the upper trendline and rises by as much as the triangle’s maximum height.

As a rule of this technical rule, the crypto market can rise toward the $2.72 trillion-$3.03 trillion area by June, depending on the breakout point.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.