Amidst all the ups and downs and negative news, Bitcoin has outperformed both gold and the stock market in terms of returns. Bitcoin has increased by more than 140% this year, this rise is expected to continue in future also.
Further rise or fall in Bitcoin?
Since last year some things have not gone right for the crypto world. The crash of cryptocurrencies last year, then the jailing of FTX founder Sam Bankman on charges of fraud and cheating, followed by the conviction of Changpang Zhao, founder of the world’s largest crypto exchange Binance, in an anti-money laundering case and Zhao’s resignation from the post of CEO. All these incidents shook the crypto market.
In such a situation, the question arises whether Bitcoin’s return to the $40,000 level is a sign that the industry is maturing and a bull run is underway, or is a big decline waiting ahead?
What is the meaning of this rise in Bitcoin?
Bitcoin has reached close to $41,000, which is a 19-month high. There are many reasons behind why the Bitcoin needle suddenly turned towards the rise. One of the reasons is that Bitcoin expects that the Federal Reserve will cut interest rates and the demand for exchange traded fund ETFs will increase rapidly. Even before this, Bitcoin had reached these levels in April last year, just before that the TerraUSD stablecoin had plunged.
The industry is awaiting the results of BlackRock’s application to launch America’s first spot Bitcoin ETF. Bloomberg Intelligence estimates that such funds will get regulatory approval by January.
What is a Spot Bitcoin ETF?
It is like any other normal ETF, but it invests directly in Bitcoin. This will be the first such instrument in the US, which so far only offers ETFs that invest in Bitcoin futures, not the spot market. This means that investors will get direct exposure to the current market price of Bitcoin.
What do experts say
Michael Novogratz, CEO and Founder of Galax Digital Bitcoin will reach its previous all-time high within a year from here. Bitcoin touched a high of around $69,000 in November 2021, after which it slipped by 64% last year. He said that once trading in Bitcoin ETF starts, huge investments will come in it within a year.
