A crypto rally is happening today, with volume in the spot market and the futures open interest rebounding. Bitcoin price jumped to $69,000, while top altcoins like Pepe Coin, Avalanche (AVAX), and Cardano (ADA) were the top gainers.
Crypto rally triggered by hope of a 50-day ceasefire
The main reason why the ongoing crypto rally is happening is that there is hope that the US and Iran will enter a new 50-day ceasefire. According to Axios, intermediaries like Pakistan and Egypt are trying to convince the two sides to reach that agreement.
Such a move would mean a substantial de-escalation at a time when President Donald Trump has threatened to bomb Iranian critical infrastructure like bridges and power plants on Tuesday.
Still, it is unclear whether there will be such a ceasefire as Iran believes that it has an upper hand. It is making more money than it did before the war started by selling over 1.5 million barrels of oil per day and charging tolls at the Strait of Hormuz.
At the same time, Iran believes that it is at an advantage as its missiles are now landing in Israel, which is rationing its interceptors. Officials believe that a ceasefire will help the US and Iran to ramp up their production of missiles and interceptors and strike again.
The Axios report comes a few hours before Trump threatened to bomb Iranian infrastructure, including bridges and power plants, committing a war crime in the process.
That attack will lead to retaliation by the Iranians, which will lead to higher crude oil prices, with Kalshi traders anticipating that it will jump to $150 soon.
A new ceasefire would likely lead to a crypto rally by reducing geopolitical tensions and lowering inflation, a move that would help the Federal Reserve slash interest rates later this year.
Morgan Stanley to launch its Bitcoin ETF this week
The crypto rally is also happening ahead of the upcoming launch of a new spot Bitcoin ETF by Morgan Stanley, a top Wall Street bank valued at over $262 billion. It will launch the fund on April 8 and hope that its many clients will invest in it.
Morgan Stanley joins other large players in Wall Street that have launched their crypto ETFs. BlackRock, the giant with over $14 trillion in assets, launched its spot Bitcoin ETF, which has accumulated over $52 billion in assets. Other companies like Fidelity, Franklin Templeton, and Invesco have all launched their funds.
BlackRock is also working on a new Bitcoin ETF known as the iShares Bitcoin Income Fund (BITA). This fund will use the concept of covered calls to generate returns for its holders.
The goal is to expose its investors to both Bitcoin appreciation and monthly returns. However, as we have written on other covered calls ETFs like JEPI, JEPQ, and SPYI, their total returns are usually lower than the underlying asset.
The crypto market rally is also happening as the volume and futures open interest rises. CoinGlass data shows that the futures open interest rose by 5% on Monday to over $107 billion. The daily volume rose by 64% to $129 billion, a sign that investors are starting to buy these coins.
Still, the ongoing crypto rally, as we have seen recently, should be taken with a grain of salt. For one, Bitcoin remains inside a narrow channel it has been stuck in for the past few months. Also, there is a possibility that the ceasefire deal will not happen.
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