Anatomy of a Bitcoin Rally

Forwarding an interesting discussion why Bitcoin is catapulting with a sustainable momentum for months ahead....How high can it go? Anyone's guess but I won't be surprised to see a $100K Bitcoin this year in 2021! Stay-tuned!!💪

Through much of September, Bitcoin was battered by a string of negative news - ranging from yet another Chinese ban on cryptocurrencies to rising criticism from U.S. regulators.

But that changed as the month drew to a close. While each development wasn't quite big enough to propel a rally on its own, together they had enough juice to reverse investor sentiment.

Here's what happened:

• Been There, Done That: While the mid-September China ban shook up the crypto markets, investors eventually realized it was actually the seventh time since 2014 that China had announced some sort of crackdown on cryptocurrencies. As concern over China faded, it became clear that Bitcoin traders had initially overreacted.

• Bitcoin ETF: In the first couple of days of October, speculation heightened that the U.S. Securities and Exchange Commission was on the verge of approving a Bitcoin exchange-traded fund. However, this would be a Bitcoin futures ETF, not the fully Bitcoin-backed ETF many crypto investors have been waiting for since 2014. Still, even a Bitcoin futures ETF would open the door for greater participation from retail investors.

• No Ban, Part One: During a Sept. 30 meeting of the House Financial Services Committee, U.S. Federal Reserve Chair Jerome Powell was asked whether he planned on taking a stance on cryptocurrencies similar to China's. "No intention to ban them," Powell responded. This came as a relief to the crypto community following a series of much more critical comments over the summer from other Fed officials, Treasury Secretary Janet Yellen, and SEC Chair Gary Gensler.

• Stamp of Approval: On Oct. 4, Bank of America launched research coverage of cryptocurrencies with a report called "Digital Assets Primer: Only the First Inning." The world of crypto is now "too large to ignore," the analysts wrote, adding "our view is that there could be more opportunity than skeptics expect." This move from one of the nation's top investment banks further bolstered Bitcoin's legitimacy as an asset class.

• No Ban, Part Two: On Oct. 5 - the day before the big whale buy - SEC Chair Gensler echoed Powell's statement in another House of Representatives hearing. Gensler said his agency also did not intend to follow China's lead, and that any ban on crypto would have to come from Congress. As with Powell's remarks, Gensler's words served to reassure the crypto community.

• The Big Money Wants In: On that same day, U.S. Bank, the fifth-largest bank in the country, said it had launched custodial services for Bitcoin. Just as important was the bank's reason for doing so: "Our fund and institutional custody clients have accelerated their plans to offer cryptocurrency and, in response, we made it a priority to accelerate our ability to offer custody services." The news was a reminder that institutional investors are moving off the sidelines and into crypto - an obviously bullish development.

It's easy to see how a crypto whale would view these events collectively as a buy signal.