21Shares sees Nvidia earnings and Friday's PCE data as potential catalysts for bitcoin boost

Bitcoin has experienced a tumultuous week, dropping to lows of around $83,700 on Wednesday — down 21% from its all-time high of nearly $110,000 — putting the largest digital asset by market capitalization in correction territory.

However, 21Shares Crypto Research Strategist Matt Mena sees potential positive catalysts on the horizon. He points to Nvidia’s strong earnings report on Wednesday and the possibility of further signs of cooling inflation in Friday’s core PCE data as key events that could boost risk asset sentiment and, by extension, bitcoin’s price.

"A positive regulatory tailwind, combined with strong Nvidia earnings — which signal continued AI-driven demand and boost overall risk sentiment — along with positive PCE inflation numbers this Friday, could create the perfect macro environment for bitcoin to not only reclaim its previous highs but potentially push beyond $150,000 as institutional and retail confidence surges," Mena told The Block.

Mena also emphasized that regulatory clarity could be a game-changer for bitcoin, particularly in attracting institutional capital. “If the U.S. provides definitive guidance on stablecoins and broader digital asset regulations, we could see significant institutional allocation into the space,” he added.

Nvidia earnings boost market sentiment

Equity market sentiment showed signs of optimism on Thursday, with S&P 500 and Nasdaq futures rising in premarket trading. The uptick comes after Nvidia's earnings report on Wednesday showed the company has modestly exceeded fiscal fourth-quarter earnings and revenue expectations, driven by continued strong demand for AI-related products. The company provided slightly higher guidance for Q1 revenue, signaling resilience in the AI sector. “Demand for Blackwell is amazing,” Nvidia CEO Jensen Huang said, referring to the company’s next-generation AI chip.

Attention is now shifting to Friday’s PCE report, a key indicator that will influence the Federal Reserve’s interest rate outlook. Markets expect a year-over-year increase of 2.5%, which remains above the Fed’s 2% target. If inflation comes in lower than expected, it could bolster risk assets like Bitcoin by strengthening expectations for rate cuts later this year. Currently, markets are pricing in two rate cuts in 2025, with the first likely in June or July.

Meanwhile, the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing on Wednesday “Exploring a Bipartisan Legislative Framework for Digital Assets,” focusing primarily on stablecoin regulation. During the hearing, Senator Cynthia Lummis, a prominent advocate for bitcoin and digital assets, reaffirmed her commitment to pushing for bipartisan legislation on stablecoins and cryptocurrency regulation.

"We're on the precipice of finally creating a bipartisan legislative framework for both stablecoins and market structure," said Sen. Cynthia Lummis, R-Wyo., during a congressional hearing on Wednesday. "I hope we can get both pieces of legislation to President Trump for his signature this year."