The recent surge in Bitcoin price is driven by a combination of factors that have created a favorable environment for its growth. Let’s see what they are.
The price of Bitcoin has seen a remarkable rise over the past seven days, reaching an 8% growth, according to data consulted on CoinMarketCap, at the time of writing this article.
This remarkable weekly increase in the price of BTC has been driven by several factors that have captured the attention of investors and analysts alike. From the arrival of the fourth halving on the blockchain network to the growing institutional adoption driven by the approval of spot ETFs, several events have contributed to creating a favorable environment for the appreciation of the most capitalized cryptocurrency in the world, whose market value is currently over $1,44 trillion.
In this article, we will explore the key catalysts that have driven Bitcoin price to new heights, bringing the cryptocurrency ever closer to its current ATH, as well as analysts’ projections for the near future.
The 4th Bitcoin Halving: A Key Event for the Appreciation of the Leading Cryptocurrency
The fourth Bitcoin halving, which took place on April 20th 2024, was one of the most anticipated events in the cryptocurrency calendar. The halving is a historical event that occurs on the Bitcoin network approximately every 4 years, and that halves the rewards miners receive for validating blocks on the network. Because of this, the halving also decreases the supply of new bitcoins.
Historically, halving events have preceded significant increases in the price of the cryptocurrency, and this latest one has been no exception. The reduction in the issuance of new bitcoins has generated bullish pressure on the market. A more limited supply of the cryptocurrency, coupled with increasing demand, is favoring the rise in the price of Bitcoin.
Spot ETF Approval: A Game Changer in Investing
The approval of several Bitcoin-based exchange-traded funds (ETFs) earlier this year has been another major catalyst for the cryptocurrency's price surge. These ETFs allow institutional and retail investors to access Bitcoin in a simpler and more regulated way, and this influx of institutional capital has been a key factor in the price increase, as it provides additional liquidity and validates Bitcoin as a legitimate asset in the financial world.
The demand generated by these ETFs has contributed to a significant increase in interest in the cryptocurrency, leading to an increase in its price.
The growing institutional adoption of Bitcoin
In addition to the above, the institutional adoption of Bitcoin has been increasing in recent months, with Large companies, investment and pension funds and even prestigious universities adopting the leading cryptocurrency to diversify their investment portfolios.
As of now, big names in the financial world, such as BlackRock and Fidelity, are offering Bitcoin-related spot funds, which has generated confidence in the cryptocurrency and the market in general. This has attracted firms such as Capula Investment Management, Millennium Management, the state pension funds of Wisconsin and Jersey City, the Michigan State Retirement System, the Norwegian sovereign wealth fund (NBIM), Stanford University’s Blyth Fund, and Emory University, which currently hold significant exposure to Bitcoin through spot ETFs.
By early September, Bloomberg ETF analyst Eric Blachunas noted that 13F filings sent to the Securities and Exchange Commission (SEC) revealed that More than 1.000 entities had invested in Bitcoin spot funds.
This trend towards institutional adoption has not only increased demand but has also contributed to the perception of Bitcoin as a reserve asset, competing with gold. Bitcoin’s growing legitimacy in the institutional arena has been a crucial factor in the recent price surge.
Recently, Balchunas reported Bitcoin spot exchange-traded funds are recording another milestone in the market, experiencing surprising levels of demand amid the cryptocurrency’s price surge. According to the expert, this phenomenon is rare in the ETF market, as, usually, the trading volume of exchange-traded funds tends to increase in times of crisis or in the midst of a recession.
“IBIT traded $3.3 billion today, the largest number in 6mo, which is a bit strange”, Balchunas commented, highlighting that the rise in the price of Bitcoin could further boost capital inflows into these investment funds next week.
The presidential elections and the expectation of possible regulatory changes in the United States
Finally, expectations about the results of the upcoming US presidential election are also influencing the cryptocurrency market. Candidates running for the US presidency, Donald Trump and Kamala Harris, have each addressed the topic of cryptocurrencies in their own way, sparking a debate about future regulation of the crypto sector.
However, Trump's campaign seems more promising for the industry, so the crypto community is looking forward to the possibility of significant regulatory changes that favor the use and development of cryptocurrencies in the country. According to expectations, the Trump administration could put an end to the regulatory uncertainty that has dominated the cryptocurrency market in the United States and attract more investors.
This possibility of a clearer and more appropriate policy for the crypto market can also act as a catalyst for adoption, if favorable regulations are implemented. Therefore, in addition to the current influence, analysts predict that the price of Bitcoin could catapult more significantly if Trump reaches the White House.
Analyst Perspectives: Where is Bitcoin Price Headed?
With the recent surge in the price of Bitcoin, analysts have begun to adjust their projections. Some experts suggest that the price could reach record levels in the near term, especially if the trend of institutional adoption continues as the presidential election approaches. These optimistic projections They place the price of Bitcoin in ranges between $100.000 dollars by the end of 2024, and $200.000 dollars, by the end of next year.
All of these projections are based on the scarcity of Bitcoin supply and the growing interest from retail and institutional investors.
However, there are also cautious voices that warn of the inherent volatility of the cryptocurrency market and the possibility of experiencing significant corrections in the cryptocurrency price.
IMPORTANT: The content of this article is for informational purposes only and, in no case, what is written here should be taken as investment advice or recommendations. Bit2Me News reminds you that before making any investment you should educate yourself and know where you invest your money, as well as the pros and cons of the system. We separate ourselves from the actions and consequences that ignorance may entail. If you decide to invest in this or another asset class, you are solely responsible for the consequences that your decisions and actions may have.
