Bitcoin today Blow $39,000 per coin for the first time since a Brutal crash of digital assets in May 2022, this brought a long and painful bear market.
Since then, the virtual coin has made a terrific comeback: in early January it was trading for less than $17,000 per coin; it is now up 128%.
Could this mean we are witnessing the start of a bull market? Some experts say it's all uphill from here.
A lot has happened in the crypto space since the Terra blockchain project collapsed Last year, this led to a collapse of all virtual coins and tokens and many bankruptcies – especially at the mega-exchange FTX.
Haunted by a toxic mix of industry failures and historically high interest rates, it looked like the cryptocurrency would never come back.
But institutions – including Wall Street giant BlackRock – have since shown significant interest in the crypto space: The company and other big-name names in finance have filed a spot Bitcoin exchange-traded fund (ETF) with the Securities and Exchange Commission. requested.
And the Federal Reserve may just be done with the tightening of fiscal policy that caused investors to avoid “risky” assets like stocks and cryptocurrencies last year.
In a report on Friday, the research team at crypto asset manager Grayscale reported said that it sees a “gradual improvement in crypto fundamentals” – as long as the central bank “finishes tightening and the US economy can avoid a ‘hard landing’ (recession).”
Grayscale also mentioned next year's halving, which will result in rewards for Bitcoin miners being halved and lead to more scarcity in the market – and that's why “is likely to have a positive impact on ratings.”
And James Butterfill, head of research at digital asset manager CoinShares, said Decipher that investors want to branch out – and that could be good for Bitcoin.
“The increasing correlation between bonds and stocks – currently at a record high of 42% (excluding the COVID-19 period) – is leading investors to seek effective diversification,” he said, adding: “Bitcoin is proven to provide significant diversification greater diversification compared to other asset classes.”
The more investors realize this, the higher the asset's price will rise in the new year, he argued.
Meanwhile, Greg Magadini, director of derivatives at Amberdata, said Decipher that the data shows that “options traders are very bullish on BTC spot prices and expect prices to rise relatively soon.”
If investors finally get their hands on the Bitcoin ETF that the SEC has repeatedly rejected for nearly a decade, capital could flood the market, analysts at CryptoQuant say predicted.
Even though the future looks bright right now, there are other things to consider.
“There are also headwinds for Bitcoin price,” said Sam Callahan of Swan Bitcoin. “These include the risk of a recession and possible rejection of a spot Bitcoin ETF,” he continued, adding that an SEC rejection could result in a “shock to the market.”
Edited by Ryan Ozawa.
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