For a deeper dive, see our full XRP forecast here.
Bitcoin Roars to New Record High on Legislation Hopes
Bitcoin (BTC) outperformed XRP on May 21 as the GENIUS Act’s progress fueled hopes for Congress to pass the Bitcoin Act. Overnight, the Senate voted in favor of progressing to the amendment process. The crypto community previously speculated that passing the GENIUS Act would be crucial for other crypto-related legislation.
Crypto Amicus Curiae attorney John E. Deaton recently commented:
“If Congress can’t get the GENIUS Act passed, we won’t see a Market Structure’s Bill, which means we won’t see any long-lasting reform until 2029, depending on how the Presidential election goes.”
State-level support for crypto has gathered momentum, fueling hopes that lawmakers will pass the Bitcoin Act. On May 21, the US state of Texas passed Senate Bill 21, the Texas Strategic Bitcoin Reserve and Investment Act. The bill now heads to state governor Greg Abbott to sign into law, allowing the state to create a special fund within the treasury to invest in crypto, including BTC.
According to the Bitcoin Reserve Monitor, New Hampshire and Arizona have approved Strategic Bitcoin Reserve bills. The US states of Alabama, Florida, Georgia, Illinois, Iowa, Kansas, Kentucky, Maryland, Michigan, Missouri, New Mexico, North Carolina, Ohio, Oklahoma, Rhode Island, and West Virginia have proposed Strategic Bitcoin Reserve bills.
BTC Rally Fueled by ETF Momentum
Meanwhile, demand for US BTC-spot ETFs contributed to BTC’s move to $110,000. The US BTC-spot ETF market may extend its inflow streak to six sessions on May 21. Inflows have tilted the supply-demand balance in BTC’s favor.
According to Farside Investors, key flow trends for May 21 included:
- Fidelity Wise Origin Bitcoin Fund (FBTC) had net inflows of $23.5 million.
- Grayscale Bitcoin Mini Trust (BTC) saw net inflows of $22.1 million.
- Bitwise Bitcoin ETF (BITB) reported net inflows of $20.5 million.
Excluding BlackRock’s (BLK) pending iShares Bitcoin Trust (IBIT) data, the US BTC-spot ETF market saw total inflows of $76.5 million after inflows of $329.2 million the previous day.
Bloomberg Intelligence Senior ETF Analyst Eric Balchunas remarked on IBIT’s rising prominence in the ETF space, stating:
“IBIT has worked its way into the top 5 ETF in YTD flows with +$9b, just passing BIL. This is wild bc just one month ago it was ranked 47th, but has since gone Full Pac-Man with a +$6.5b spree. As gold and cash ETFs slip down, the leaderboard is slowly turning back into 2024.”
BTC Price Outlook: Monitor Capitol Hill and ETF Trends
BTC rallied 2.57% on May 21, to close at $109,605. Significantly, BTC climbed to a new record high of $110,697 before easing back.
BTC’s near-term outlook depends on Capitol Hill news, global trade headlines, macroeconomic indicators, and ETF inflows.
Potential scenarios:
- Bearish Scenario: Rising trade tensions, legislation deadlock, US recession fears, and ETF outflows. Bearish sentiment could send BTC below $100,000.
- Bullish Scenario: Easing trade tensions, upbeat US economic data, GENIUS Act progress, and ETF inflows. Bullish sentiment could drive BTC above the record high of $110,697.
