With bitcoin hitting new records almost on a daily basis, some analysts predict that the world’s largest cryptocurrency may cross $100,000 in the near future..
A flush of investor cash has been flowing into the cryptocurrency as increasing acceptance by authorities bring it to the mainstream, along with the expected halving event next month, the possibility of lower interest rates makes alternative assets attractive.
“Based on historical experience, rapid pullbacks often occur during sharp uptrends, constituting a common phenomenon of market deleveraging. The swift recovery in price indicates investors’ steadfast optimism and confidence in bitcoin. Based on our analysis, bitcoin could potentially hit $120,000 to $140,000 in this bull market cycle,” Vugar Usi Zade, chief operating officer at Bitget, said.
Flows of capital into the 10 largest US spot bitcoin exchange-traded funds slowed to a two-week low in the week to March 8, but still reached almost $2 billion, LSEG data showed.
Bitcoin’s 70 per cent YTD gain has dwarfed the gains across major and well-established asset classes. The gains are closest to the ones seen in investor darling stock NVIDIA, which is up by 80 per cent this year, analysts say. “Technically, the current rally in crypto is a classic example of a parabolic run. The market debate continues on the ensuing top – 100K, 150K, or even 300K. As per the latest on-chain analytics report, Bitcoin’s record-breaking rally is creating over 1,000 millionaire wallets across the crypto token holdings. For starters, around 3,500 + new millionaire wallets were being made during the last 2021 bull run. The market momentum for Bitcoin has been so strong that even the rest of the altcoins have now started taking a cue from Bitcoin’s past movement,” says Vijay Valecha, chief investment officer of Century Financial.
Bitcoin won further support Monday after Britain’s Financial Conduct Authority watchdog said it would join US regulators by allowing the creation of crypto-related securities.
US authorities earlier this year gave the green light to exchange-traded funds (ETFs) pegged to bitcoin’s spot price, making it easier for mainstream investors to add the unit to their portfolio.
“The volume indicator is showing pronounced bars, pointing to a trend that is only growing stronger, with bulls not showing any signs of stopping. If sustained, bitcoin could climb to the $80,000 psychological level, nearly 10 per cent above current levels,” Lockridge Okoth, FXStreet analyst, said in a note.
Bitcoin price is also rallying on the back of reports that MicroStrategy has added to its Bitcoin portfolio. Specifically, the business intelligence firm has acquired an additional 12,000 bitcoin for approximately $821.7 million using proceeds from convertible notes and excess cash. The average purchase price for this acquisition was approximately $68,477 per bitcoin token. “As of 3/10/24, MicroStrategy holds 205,000 bitcoin acquired for roughly $6.91 billion at an average price of $33,706 per bitcoin,” MicroStrategy CEO Michael Saylor tweeted.
With this, MicroStrategy sidesteps the BlackRock iShares ETF (IBIT), which had reported surpassing MicroStrategy with 195,985 bitcoin in its portfolio as of Friday after another day of significant inflows. This is data coming from the firm’s recent disclosure. By then, MicroStrategy only held around 193,000 bitcoin.
Bitcoin ETFs witnessing $2.7 billion weekly inflows, led by BlackRock’s iShares Bitcoin ETF and Fidelity reflects the growing demand for bitcoin investments among traditional investors and institutions. Despite lingering concerns over the US inflation announcement , factors such as CPI calculation changes and rising expectations are unlikely to affect Bitcoin’s rally.
Bitcoin is created — or ‘mined’ — as a reward when powerful computers solve complex problems to validate transactions made on the blockchain.
But the reward given to bitcoin ‘miners’ — those who contribute to the creation of the blockchain by validating transactions — is about to be divided by two.
Next month’s so-called “halving” has lent strong support to the unit’s price in recent days and weeks by tightening supplies.
However, if traders cash in on the gains made over the past five days, Bitcoin price could retract back into the supply zone. “A break and close below its midline at $64,044 would confirm the continuation of the downtrend. This could see bitcoin roll over to the $60,000 threshold before a possible pullback,” Okoth wrote.
With the next Bitcoin halving scheduled near April 21, all eyes will be on whether there will be some pullback for the crypto. “If history is any guide, any downward cycle in Bitcoin tends to be steep and deep. Partial profit booking ( if any ) for long holders is advised, considering that many of the positives have already been hugely discounted by the institutional and big market players,” Valecha said.
Timeline
2008: The concept of Bitcoin is introduced in a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” by an individual or group using the pseudonym Satoshi Nakamoto.
2009: The first Bitcoin software is released, and the first block, known as the “genesis block,” is mined, marking the beginning of the Bitcoin blockchain.
2010: Bitcoin achieves parity with the US dollar for the first time, with the exchange rate reaching $1 for 1 bitcoin.
2013: Bitcoin experiences its first significant price bubble, reaching over $1,000 per bitcoin before crashing back down to around $200.
2017: Bitcoin experiences another major price surge, reaching an all-time high of nearly $20,000 per bitcoin in December.
2017: Bitcoin forks for the first time, leading to the creation of Bitcoin Cash (BCH) as a result of a disagreement within the community over how to scale the network.
2018: The price of Bitcoin experiences a significant correction, dropping from its peak in 2017 to around $3,000 – $4,000 per bitcoin.
2020: Bitcoin experiences a significant resurgence in interest and price, fueled by increased institutional investment and macroeconomic uncertainty due to the Covid-19 pandemic.
2021: El Salvador becomes the first country to adopt Bitcoin as legal tender.
2022: Bitcoin’s Lightning Network, a layer-2 scaling solution designed to enable faster and cheaper transactions, sees significant growth in adoption, improving Bitcoin’s usability for everyday transactions.
2023: Regulatory clarity around Bitcoin continues to evolve, with several countries implementing regulations to govern its use and taxation.
2024: US Securities and Exchange Commission and Britain’s Financial Conduct Authority allow the creation of crypto-related securities.