Bitcoin is close to $42,000 this Monday, after breaking the 40,000 barrier with which it had been struggling for several sessions. The possibility of approving an ETF linked to the cryptocurrency and a technical process that will reduce the reward that miners receive for their operations set the trend.
In the last week it has appreciated 13%, according to data from Coinmarketcap. Despite reaching a 20-month high, doubts have not been dispelled from the ecosystem, especially after the FTX scam was uncovered last year and the recent $4.3 billion fine on Binance for money laundering and regulatory non-compliance.
After already rising 150% in the year, it has reached a key level that will test whether a new rally is coming. The cryptocurrency par excellence, the most valuable, has in its history spectacular rises, also followed by notable collapses.
The industry is waiting to see if the green light is given to the bitcoin ETFs that several firms have requested, including BlackRock. The key date on the calendar appears as January 10, 2024, when the SEC, the regulator, must have already ruled.
It is very similar to any other ETF, but you will invest directly in bitcoin. It will be a first in the US, which to date offers ETFs that invest in bitcoin futures rather than the spot market. This will open the door to more conservative and institutional investors.
Bitcoin "seems to mark a decisive change and move away from the bearish trend of 2022 and early 2023," said Justin d'Anethan, from the Keyrock agency.
And there is another factor that drives the price: the halving scheduled for April 2024. With this operation, the reward for block mining that miners receive will be reduced from 6.25 bitcoins to 3.125, which would limit the growth of the supply. It is something that happens every four years. After this occurs, increases in value usually come.
There are tailwinds behind the cryptocurrency. Optimists say the push to curb questionable or outright criminal practices is working and that the flood of ETF applications is a sign that the industry is maturing, with potential to broaden the investor base.
Michael Novogratz, an analyst at Galaxy Digital, has told Bloomberg that bitcoin is destined to reach its all-time high, $69,000 in November 2021. This was followed by a 64% drop in 2022. The forecast is that if ETFs approve, billions of institutional investors could enter, managing between 15 and 17 trillion dollars.
Meanwhile, investors are increasingly convinced that the Federal Reserve has ended rate hikes, fueling a rally in global markets. Fixed income gives way to other riskier options, such as equities or cryptocurrencies.
But betting on rate increases again or derailing the approval of ETFs could condemn bitcoin to new falls.
The rise of bitcoin is infecting the rest of the cryptocurrencies. Among those that follow by market capitalization, Ethereum gains 11% in one week, BNB (from Binance) 3%, XRP 6% and Solana 14%.
