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What’s really driving the Bitcoin rally?

What’s really driving the Bitcoin rally?
Bitcoin climbed above $34,000 this week. The question is why. Credit: Andrés Núñez/DL News.
  • Bitcoin has rallied this week, but what is behind the jump?
  • Thomas Carreras takes a deep dive into our reporting on Hamas and Bitcoin spot ETFs to find out.

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Happy Friday!

Tom here.

Bitcoin shot from roughly $29,500 to $35,000 — visiting price levels it hasn’t seen since May 2022 — this week and shows no sign of stopping.

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Analysts at Bernstein said the move was due to institutional hype and signs that BlackRock’s Bitcoin exchange-traded fund application is on track for approval.

BitMEX founder Arthur Hayes, however, said investors are worried about the US getting dragged into a war in the Middle East, and the impact this will have on the economy.

The worse and more prolonged the conflict, the more likely investors are to flee to safe haven assets like gold and Bitcoin, pushing up their price, Hayes said.

In other news, disgraced crypto mogul Sam Bankman-Fried decided to take the stand this week.

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The decision came after the prosecution pelted the defence with a barrage of heavy testimonies from the FTX founder’s inner circle — such as his ex-girlfriend and former CEO of Alameda Research Caroline Ellison and FTX co-founder Gary Wang.

Bankman-Fried has pleaded not guilty to criminal charges ranging from fraud to money laundering.

Meanwhile, Senator Elizabeth Warren is citing a Wall Street Journal article to argue that Hamas used crypto to finance its terrorist activities.

However, Elliptic disavowed the publication’s reporting. The blockchain forensics company — whose information the newspaper relied on for its report — said WSJ reporters had “misinterpreted” the data and overstated the impact of crypto in Hamas financing.

Then, on Thursday, the Senate Banking Committee held a hearing on the subject of terrorist financing.

During it, Shlomit Wagman, former director-general of the Israel Money Laundering and Terrorism Financing Prohibition Authority, said “crypto is currently a very small part of the puzzle” for terrorist financing.

In the case of Hamas, “most of the funds are still being transferred by the traditional channels,” Wagman said, including banks, money transmitters, payment systems, money exchanges, trade-based terrorism financing, charity, cash, and shell companies.

Have a great weekend,

Tom.

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