With bitcoin hitting new highs, it’ll likely reach the US$100,000 milestone before 2024 is out
Bitcoin has just hit an all-time high of more than US$72,000 (£56,300), pushing past the level of circa US$69,000 where it turned back during its last bull phase in late 2021.
- Bitcoin has just hit an all-time high of more than US$72,000 (£56,300), pushing past the level of circa US$69,000 where it turned back during its last bull phase in late 2021.
- This can often be a time when cryptocurrencies get weaker, so it shows how strong they have been lately.
- So what has contributed to this explosion in prices and where is the market going for the rest of 2024?
Bitcoin ETFs
- A total of 11 bitcoin ETFs were approved in the US, and their daily trading volume has now exceeded US$10 billion – driven by frontrunners Blackrock and Fidelity Investments.
- This demonstrates the large interest from traditional market participants, and as the spot ETFs become more mature, their providers will offer more promotional material and education to get more customers onboard.
- The cryptocurrency market is always adapting and innovating, and one possible future innovation is the offer of option contracts on the new spot ETFs.
- However, US regulator the Securities and Exchange Commission (SEC) has just postponed a decision on this innovation until late April.
The bitcoin halving
- The last halving took place in May 2020, where miners went from receiving 12.5 bitcoin for each unit of work they do to 6.25 bitcoin.
- Because each halving means less new bitcoin coming on to the market, they have coincided with strong price appreciation in the cryptocurrency.
- One theory is that the institutions behind the spot ETFs are buying aggressively now because they know there will be less bitcoin on the open market once the halving takes place.
Ethereum prospects
- Meanwhile, the crypto market could also be boosted by spot ETFs for the ethereum cryptocurrency system in the coming months.
- While that uncertainty continues, ethereum could be boosted by the so-called Dencun upgrade (also known as Duncan or EIP-4844).
- Ethereum has competition from other blockchains such as solana and avalanche due to its relatively slow transaction speed and high costs.
Where next
- The market is very volatile, and often exceeds expectations when it goes up or down.
- However, the majority of commentators expect crypto prices to keep rising over the coming months.
Andrew Urquhart owns some cryptocurrencies.