The disclaimer, ‘Investments are subjected to market risks, read all scheme related documents carefully’, seems to hold true for cryptocurrency investments as well. Let’s take the example of Bitcoin (BTC)! Not so long ago, the cryptocurrency was struggling to cross $30,000. However, in recent context, not only did it position itself near the $40,000 price range but has crossed it, and is expected to reach the $45,000 level. “This $40,000 price level might serve as the starting point for the forthcoming bull market. At the macro level, anticipation of interest rate cuts by the Federal Reserve seems to have propelled commodity prices higher, with BTC rebounding by nearly $15,000 over the past month. Given the potential for a recession in the US economy, fund managers are predicting an 80% consensus level for a trend of interest rate reduction in 2024,” Ryan Lee, chief analyst, Bitget Research, told FE TransformX.
Going by market reports, BTC surpassed the $40000 price range for the first time since it last clocked the value in April 2022. From what it’s understood, the increase in BTC’s price can be attributed to the approval of many spot BTC ETFs by the Securities and Exchange Commission (SEC), a US-based government agency. It’s believed that the authorisation of spot BTC ETFs can come as early as January 2024. In recent developments, BlackRock, a multinational investment company, secured seed-fund worth $100,000 for its anticipated spot BTC ETF next year. According to Swan Bitcoin, a BTC-based financial services company, other spot BTC ETFs that investors should be observing for next year include Simplify BTC Strategy PLUS Inc ETF (MAXI), ProShares Short BTC Strategy ETF (BITI), VanEck BTC Strategy ETF (XBTF), ProShares BTC Strategy ETF (BITO), and Global X Blockchain & BTC Strategy ETF (BITS).
“I believe the rise in BTC’s value could be seen as a positive sign for upcoming ETFs. As Bitcoin’s price stabilises and demonstrates resilience at higher levels, it could bolster the case for regulatory approval of ETFs, potentially allowing more traditional investors to access the cryptocurrency market. Industry players, whether individuals or institutions, should proceed with caution and conduct thorough research before making investment decisions,” Sumit Ghosh, CEO, Chingari, a Web3.0 live streaming application, highlighted.
Despite the fraudulent conundrums concerning Sam Bankman-Fried, founder and former CEO, FTX, and Changpeng Zhao stepping down from his CEO role in Binance, media reports have shown that BTC has clocked a 150% rise in value this year. As per observations made by @rektcapital, a crypto analyst on X, formerly Twitter, BTC price could secure the $45,000 value before the fourth halving event, which has a timeline for April, 2024. Data provided by analysts of Santiment, a cryptocurrency market data platform, has mentioned that BTC’s price could reach as close as $50,000, based on factors such as an increase in BTC’s demand or the cryptocurrency’s traders getting involved in profit-taking. Furthermore, the platform also stated about witnessing a Fear Of Missing Out (FOMO) trend in correlation with BTC price’s rise. Analysis supplied by CoinGlass, a cryptocurrency futures trading and information platform, showed that the BTC open interest, for the period December 1 to December 5, increased around 17%. Reportedly, the open interest value concerning BTC went up from $16.89 million to $19.64 billion, for the first time since December, 2021.
On December 3, 2023, the official website of Nasdaq, an American stock exchange, reported that apart from the rise in BTC value, other cryptocurrencies such as Dogecoin (DOGE) and Ethereum (ETH) also recorded an increase in their prices which took the worldwide cryptocurrency market capitalisation to $1.51 trillion, on account of a 1.6% increase. As of December 6, 2023 (13.08 pm, Indian Standard Time), CoinMarketCap, a crypto price-tracking website, stated BTC’s price to be around $43,530 at a $852.17 billion worth market capitalisation. Moreover, future predictions provided by Changelly, a cryptocurrency exchange, showed that BTC’s price will clock a 3.67% rise to reach $43,880 on December 7, 2023. Market expectations have indicated that based on the scrutiny conducted on BTC prices for the last couple of years, for 2024, the cryptocurrency should clock a minimum value of $19,838.03 and a maximum value of $43,539.87, which can take its average trading price to $67,241.70.
“The US Fed is expected to cut the interest rate in 2024, which may boost liquidity in the market. The US Committee on Financial Services, calling a December 8 hearing on digital assets, may lead to a regulatory framework focussing on investor protection, which could prove beneficial for the digital asset market. The optimism around BTC ETF approval should continue to create positive sentiments within the global digital asset community and we can expect this momentum to sustain,” Shivam Thakral, CEO, BuyUcoin, a digital asset exchange, concluded.
