Bitcoin's Rally and Pullback
Bitcoin climbed above $81,000 on Tuesday, reaching its highest level in nearly 15 weeks, according to CoinGape. The cryptocurrency surged to $81,265 before dropping to $78,254 as traders locked in profits.
CoinGape reported that Bitcoin climbed approximately 28% after two rounds of recovery from the $62,000 area over eight days. The asset erased three months of losses, and its weekly gain was reported as the second largest in the past five years.
Institutional Demand and ETF Inflows
CoinGape attributed the rally to "escalation of institutional demand, enhanced cryptocurrency sentiment, and positive macroeconomic conditions." On August 24, S. spot Bitcoin exchange-traded funds posted net inflows of $338 million, with BlackRock's IBIT contributing $209 million.
Divergent Views on Sustainability
Billionaire investor Mark Cuban, quoted by The Motley Fool, said he's convinced the recent run-up is unsustainable, calling it the result of a temporary short squeeze. In May, Cuban announced he was selling all his Bitcoin because it had "lost the plot," arguing that Bitcoin wasn't working as a financial hedge, wasn't a real alternative to gold, and was no longer a reliable safe haven asset.
Cuban's bearish case rests on the idea that Bitcoin often acts as a risk-off asset, a place to park money during crises. Former Federal Reserve chairman Jerome Powell referred to Bitcoin as "digital gold" in December 2024, according to The Motley Fool.
However, The Motley Fool notes that BlackRock has highlighted Bitcoin's dual nature as both a safe haven and a risk asset, suggesting a shift to risk-on behavior could undermine Cuban's thesis. Coinbase CEO Brian Armstrong believes the Bitcoin bottom is in and projects the price could reach $400,000 by 2030, the article also reported.