Many institutions are planning to invest in cryptocurrencies, and Bitcoin has surpassed $28,000 for the first time since late May

On the afternoon of June 20th, New York time, Bitcoin broke through $28,000 for the first time since May 29th.

Bitpush terminal data showed that as of 4:05 PM New York time, Bitcoin rose to $28,016, a 24-hour increase of 5%. According to CoinGlass data, short traders lost about $36.6 million in liquidations in the past 24 hours. This is the largest short position liquidation since May 28.

Institutional entry triggers Bitcoin rebound

Market sentiment turned positive after several large traditional financial institutions announced their crypto plans.

Banking giant Deutsche Bank said on Tuesday that it has applied for a digital asset custody license in Germany. Financial giants such as Charles Schwab, Citadel Securities and Fidelity Digital Assets have invested in cryptocurrency exchange EDX Markets, which has opened BTC, Ethereum , Litecoin and Bitcoin Cash (BCH) trading.

Last week, investment management giant BlackRock surprised the market by filing for a spot BTC exchange-traded fund (ETF), which also boosted the price of Bitcoin . The move also had an impact on other Bitcoin products, such as Grayscale 's Bitcoin Investment Trust ( GBTC ), which saw a 400% surge in trading volume.

While BlackRock is not the first company to apply to the SEC for a Bitcoin ETF, it is the largest of all applicants so far. With more than $8.5 trillion in assets under management, the company will also use Coinbase to custody the Bitcoin in the trust. So far, the SEC has refused to approve a spot Bitcoin ETF, although companies including Cathie Wood 's ARK and 21Shares have submitted three applications.

Brent Xu, CEO and co-founder of decentralized finance ( DeFi ) bond market platform Umee , told Coindesk : "The rise in Bitcoin is definitely related to the news that all these large traditional financial institutions want to seriously engage with the digital asset ecosystem. It is clear that the customer base of BlackRock, Fidelity and other companies wants to invest in Bitcoin and other crypto assets through ETFs and other more traditional investment tools. This offsets the impact of the relatively pessimistic regulatory environment in the United States to a certain extent, and it also seems to indicate that these large companies want a clearer and fairer regulatory environment than the current one."

The data also shows that after the U.S. SEC filed a lawsuit against cryptocurrency exchanges Binance and Coinbase and declared multiple tokens to be unregistered securities, Bitcoin's dominance rose to its highest level in nearly two years, at 45.84%. The last time such a level appeared was in July 2021, when it peaked at 46.77%.

The US dollar index cools down and the halving event is positive

Another positive sign is the cooling of the US dollar index (DXY). Historically, when the DXY index retreats, sentiment towards risk assets such as Bitcoin increases. As the Federal Reserve paused its rate hikes last week, some market participants believe that the US economy may grow and the dollar may continue to cool. If this happens, Bitcoin may continue to rise along with the stock market. The better the macro environment, the more favorable it is for Bitcoin prices.

The upcoming Bitcoin halving in April or May 2024 could also be a factor. Bitcoin halvings occur approximately every four years and cut the reward for mining new Bitcoin blocks in half, effectively reducing the rate at which new Bitcoins are produced to control inflation and maintain Bitcoin’s scarcity. The upcoming halving event will cut the block reward in half from 6.25 BTC to 3.125 BTC. JPMorgan analysts predicted late last month that the upcoming halving could help Bitcoin reach a price of $45,000.

Michael Saylor, a Bitcoin bull and founder and chairman of MicroStrategy , said in an interview with Bloomberg earlier this week that he expects BTC to rise tenfold from around $25,000 and then rise tenfold again. He said: "The entire industry is destined to rationalize, leaving only Bitcoin and six to a dozen other proof-of-work (POW) coins."