- Investor confidence in cryptocurrencies grows, driving market capitalization and trading volumes up.
- Anticipation of U.S. SEC approval for Bitcoin ETFs fuels market momentum.
- Experts predict Bitcoin could reach $100,000 by end of 2024.
Over the recent weeks, there has been a notable increase in capital entering the cryptocurrency market. The confidence among investors seems to have grown, as evidenced by the rising trading volumes and the reaching of yearly highs by key cryptocurrencies.
Certainly, most of the momentum has been driven by heightened conjecture regarding the U.S. Securities and Exchange Commission’s approval of a spot Bitcoin Exchange-Traded Fund. Previous debates focused on the possibility of the regulator granting such approval, but a shift in the SEC’s stance has redirected discussions towards anticipating the timing of the approval.
Bitcoin ETF Spurs Bull Rally with Institutional Appeal
The market is abuzz with anticipation, and the approval of a spot Bitcoin ETF is anticipated to affect the cryptocurrency market considerably. In a recent report, Matrixport mentioned that a growing interest from institutional investors in this sector will likely fuel the forthcoming cryptocurrency bull market.
Major institutional companies such as BlackRock, the biggest asset manager globally, have submitted applications to introduce spot Bitcoin exchange-traded funds (ETFs). According to Matrixport’s calculations, a sanction of these ETFs might propel the value of Bitcoin
Observing the latest events, experts at Standard Chartered Bank have reaffirmed their belief that Bitcoin will attain a value of $100,000 by the conclusion of 2024. The institution concurred with Matrixport in their forecast that the trigger for the upcoming surge in value would be the introduction of spot bitcoin ETFs, anticipated to occur earlier than previously thought.
Additionally, they anticipated that Ethereum would experience gains from the rising prices, as shown by the heightened number of ETH ETF applications. Concurrently, Standard Chartered indicated its belief that the forthcoming Bitcoin ‘halving’ set for the end of April 2024 will catalyze an increase in its price.
Similarly, Matrixport pointed out the Bitcoin halving event as a trigger, in conjunction with anticipated reductions in interest rates within the United States, which are expected to increase consumer expenditure greatly. Moreover, the company mentioned that increasing worries regarding the U.S. debt-to-GDP ratio will likely drive investors to move away from the dollar and towards BTC to preserve their wealth.
A Bitcoin ETF that directly holds the cryptocurrency is still a key driver for increasing its value. Notably, this digital currency holds the position of being the most valuable by market cap. According to the cryptocurrency price tracking website CoinMarketCap, Bitcoin’s market capitalization stands at $738 billion.
Bitcoin Poised to Boost Overall Market Surge
Bitcoin’s market leadership means its price fluctuations frequently set the tone for the entire market mood. In the 2021 surge, Bitcoin reached its highest value ever at $69,000, coinciding with the cryptocurrency market as a whole reaching unprecedented levels. Similarly, when Bitcoin’s value falls, it typically leads to a downturn in prices across the board, mirroring past downturns experienced by major digital currencies.
Currently, the price of Bitcoin is significantly below its peak value, but forecasts from specialists indicate that the cryptocurrency might exceed its peak from 2021. Introducing a spot Bitcoin ETF is anticipated to provide investors access to the conventional market. A Reuters report predicts that the sanctioning of an ETF could attract roughly $3 billion from investors within the initial trading days, potentially attracting additional billions subsequently.
The report from Gemini indicated that the authorization of the ETF would grant access to the digital asset market for the $36.7 trillion retirement fund industry. The company pointed out that many investment and retirement accounts have not had the opportunity to invest in Bitcoin. Nonetheless, the entry of well-known, substantial institutional firms into the market will likely provide confidence to investors considering participating in the ecosystem.
Additionally, Gemini forecasted that the wider cryptocurrency ecosystem, encompassing a variety of applications and initiatives, would also experience advantages. The company observed a pricing link between Bitcoin and alternative cryptocurrencies and expects that, with an increase in Bitcoin’s value, there will be a corresponding increase in business activities connected to alternative coins, decentralized finance (DeFi), and Web3 assets. Gemini also envisions positive growth prospects for businesses active in these sectors.
Certain Crypto Circles Keep Their Doubts
Although an ETF could confer legitimacy on Bitcoin as an investment suitable for institutions, not every player in the market shares the same level of enthusiasm. According to Reuters, some prominent blockchain and cryptocurrency industry figures, such as ProShares, Amplify Investments, and Roundhill, have avoided introducing a Bitcoin ETF.
The report indicates that numerous companies are concerned about the saturation of the market and the possibility that consumer interest might not meet their expectations. Additionally, these businesses have expressed grievances regarding the excessive expenses associated with regulation and marketing.
Could Crypto Erase Its Losses from 2022?
Speculation suggests that an ETF might be approved as soon as January, leading the cryptocurrency market to anticipate that 2024 will be the year that compensates for past declines in value. This follows the 2022 downturn in the cryptocurrency market, caused by several institutional failures and came after the 2021 price surge.
During the period in question, the cryptocurrency market saw a decline in investor confidence as it came under increased regulatory examination. This heightened regulatory focus continued into the current year, with prominent figures in the crypto industry, including Binance’s CEO Changpeng Zhao, being convicted for violations of anti-money laundering regulations. Meanwhile, Terra Luna’s founder, Do Kwon, has not yet been charged but is anticipated to be extradited to either the United States or South Korea. Currently, the total value of the cryptocurrency market is approximately $1.4 trillion, which is a substantial decrease from its all-time high (ATH) of more than $3 trillion. Should Bitcoin experience a rise above $100,000 and the wider market enters a bull phase, it is possible that the overall market capitalization could surpass the $3 trillion mark observed during the last bull market.
Disclaimer: The insights, perspectives, and data presented in this price analysis are published in good faith. Readers must conduct their own research due diligence. Any decision made by the reader is solely their responsibility, and Crypto Outlooks shall not be held responsible for any consequential or incidental harm or loss.
