On Wednesday, its price topped $30,000 to hit its highest level since April 14, according to Coin Metrics data. “All eyes for capital inflows are now increasingly being dictated by institutional money,” he stated, speaking to the growing role of major players. “Our analysts have observed that a consolidation of liquidity and a subsequent surge has come from liquidity in the institutional markets,” Lee emphasized. “The prices of crypto assets have rebounded to range highs after the drawdown following the approval https://www.tokenexus.com/how-to-buy-bitcoin-with-cash-the-most-popular-exchanges/ of spot Bitcoin ETFs,” he claimed. “These bitcoin products on net are receiving inflows, but you did see speculative positioning, whether that’s in futures or options, get to pretty high levels, indicating long positioning prior to the launch of the ETFs,” Pandl said. Those may grab attention, but advertising on platforms such as Google are more efficient tools for asset managers trying to raise capital from investors, said Ben Johnson, head of client solutions for asset management at Morningstar.
“With TradFi Indices continuing to make new all-time highs, Bitcoin is likely to see its strength continue after the idiosyncratic events earlier in the month,” he stated, offering an optimistic outlook for the cryptocurrency. Joshua de Vos, Research Lead at CCData, also focused on this key development when offering his assessment of the digital currency markets. Admittedly, hitting $100,000 in 2024 might be a bit of a long shot, but it is undoubtedly in the cards. If Bitcoin doesn’t hit six figures this year, it only provides more time for investors to accumulate it as it hurtles toward the highly anticipated $100,000 mark. Any alteration to an asset’s supply will add upward pressure to its price as long as demand stays constant, and by almost every account, it doesn’t look like demand for Bitcoin is going anywhere.
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In the last bitcoin cycle, market momentum was largely driven by big, institutional names as investment banks from Morgan Stanley to Goldman Sachs set up trading desks to give their clients exposure to the digital currency. “First observation we made earlier in the week was a slowing of net asset outflows of the Grayscale’s Bitcoin ETF (GBTC). “We believe Google — among other search engines — is an important piece of our larger marketing strategy,” said a spokesperson for Invesco, which recently reduced the management fee on its bitcoin ETF from 0.39 per cent to 0.25 per cent.
Now, the digital coin’s historically low supply will come under even greater pressure with a halving on the horizon. While the halving holds the potential to push it close to $100,000, the added impact of a supply shortage will likely prove to be extra fuel it needs to reach six figures. She expects, however, that toward the end of the year, the cryptocurrency will climb toward $50,000, citing attempts from larger market players to prop up the market, with big purchases making outsized moves. “Bitcoin and ether are both being manipulated in this way by the professional traders. They don’t trade most of the time, they wait until there’s a bit of good news,” Alexander said.
How Bitcoin makes it to $100,000
After 210,000 blocks are added to the blockchain — or roughly every four years — the crypto’s inflation rate is cut in half. Daily trading volume in the cryptocurrency currently sits at around $24 billion, according to crypto data website CoinGecko. “Our analysis of market orders over 5 BTC reveals an aggressive surge in market buying, suggesting large players are seeking to gain exposure to digital assets.” “Bitcoin’s recent surge in value has largely been driven by large trades within a less liquid market,” Jamie Sly, head of research at CCData, told CNBC via email. “Following the observation of net asset outflows was a second fundamental indicator, the arbitrage or price differential between the GBTC ETF and Bitcoin’s spot market,” the market observer noted.
Marc P. Bernegger, a serial entrepreneur who serves as the cofounder of crypto fund of funds AltAlpha Digital, summed the situation up nicely.
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The recent price action echoes activity in 2018, when both bitcoin’s price and volumes were subdued for several months before beginning to rise again the following year. However, the market really started to break out only when retail traders started to take notice — in early 2021, people became tempted by the phenomenon that was NFTs, or nonfungible tokens, and other more speculative bets. That lack of liquidity has in part been driven by the regulatory scrutiny of the crypto industry from U.S. authorities. The Securities and Exchange Commission has sued major exchanges such as Coinbase and Binance. The world’s largest digital currency has risen more than 12% since the beginning of June.
The firms have stepped up marketing and are engaged in a fierce fee war, as every spot bitcoin ETF issuer except Grayscale, which charges a fee of 1.5 per cent, has either waived or slashed fees as the fledgling products grow their asset bases. While around 19.6 million bitcoins are technically in circulation today, only 2.3 million are readily available for purchase on exchanges. More importantly, such low levels mean that the upcoming halving will be the first time in Bitcoin’s history that there are fewer coins on the market than during the previous halving. Even though you can’t physically hold a bitcoin, it’s like any other asset in that its price is subject to supply and demand.
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For all of Bitcoin’s history, the total supply on exchanges grew, even as halvings passed. The explanation for this is multifaceted, but the most concise one bitcoin market depth is that demand has finally started to outpace supply. Underpinning its robust monetary model is an event hardwired into its code known as the halving.
- Low liquidity, which has been a feature of the crypto market all year, is also partly behind bitcoin’s 80% year-to-date rally.
- All transactions are recorded in a public distributed ledger referred to as a blockchain.
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- Bitcoin prices rallied today, climbing north of $48,000 as strong demand for bitcoin exchange-traded funds fueled compelling gains in the world’s most prominent digital currency.
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- “Any bit of news, if it’s good, then the professional traders trade — otherwise, they’re not trading,” Carol Alexander, a professor of finance at the University of Sussex, told CNBC.
Big funds and crypto-focused hedge funds are among the market participants driving the action, Ayyar added. Indeed, bitcoin has traded within a range this year, and attempts to burst significantly higher have been thwarted. “Any bit of news, if it’s good, then the professional traders trade — otherwise, they’re not trading,” Carol Alexander, a professor of finance at the University of Sussex, told CNBC. “However for us, eyes are on the next volatility trigger, the Bitcoin halving. At DefiDive, we anticipate a continued growth in liquidity sources and have a bullish forecast for 2024,” he concluded.