Bitcoin is at its highest point in history, how? A basic concept in economics, supply, and demand, lies at the core of the bitcoin rally that is driving the cryptocurrency towards a record high.
Bitcoin is at its Highest Point in History
Long-term bitcoin investors’ willingness to sell their holdings is outpacing the demand for the token from recently established US exchange-traded funds. As a result, the cryptocurrency market erupted and traders drawn by momentum closed their negative bets, and leveraged bets on further increases multiplied.
With the cryptocurrency market experiencing a wild day, on Wednesday, bitcoin surged as much as 13% to US$63 968, marking its first move above $ 60,000 since November 2021. However, it pared some of these gains and was trading at $ 61,300 as of 10.30 am on Thursday in Singapore.
Bitcoin Has Increased By More Than 40%
Leading US digital asset exchange Coinbase experienced service disruptions along the route due to an increase in traffic before eventually resuming operations. Since the US ETFs, which directly own the token, made their successful debut this year, Bitcoin has increased by more than 40%. On January 11th, the group of funds from institutions such as BlackRock and Fidelity Investments became operational, attracting net inflows of about $7 billion thus far.
With reduced expectations for looser monetary policy, the token is already approaching its pandemic-era record of $ 68,991.85, a positive outlier amidst broader caution in global markets. The optimistic prognosis is being bolstered by the impending “halving” of Bitcoin’s supply increase, despite ongoing discussion regarding the event’s actual influence on price prospects.
Jonathan Miller, MD of the Kraken Australia digital asset exchange, explained,” Optimism around bitcoin is being driven by a few factors working together: the spot BTC ETF inflows in the US, the upcoming reduction of new bitcoin issuance known as the halving, and overall renewed optimism around the crypto asset class as a whole.”
Bitcoin’s Value has More Than Tripled Since the Beginning of The Year
Since the beginning of the year, the value of Bitcoin has more than tripled, recovering from a 64% decline in 2022. That is an incredible recovery from a slew of scandals and bankruptcies that had cast doubt on the viability of cryptocurrencies. Ryan Kim, head of futures at digital asset prime brokerage FalconX, described it as “pretty nuts.”
In 2024, bitcoin has outpaced conventional assets like equities and gold, offering traders a volatile hub in search of chances. Traders in the market have warned of a supply shortage due to the inflows into bitcoin ETFs. For the last six months, about 80% of Bitcoin’s supply has remained in circulation. More than 300,000 Bitcoins, or seven times the quantity of fresh coins mined since January 11th, are present in the nine new spot ETFs.
Following the anticipated halving in late April, the daily production of new coins will decrease to 450 from 900. Advocates predict that the price has the potential to rise if demand remains unchanged.
On the other hand, some analysts are cautioning against the boom-and-bust cycles that have come to represent cryptocurrency due to the rapid advancement of the field.
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