Steady growth, fluctuations expected
At the beginning of 2023 BTC was trading at around $16,000 but it has been growing steadily ever since. Over just the last month bitcoin has grown by 16% and is currently trading at $30,714 compared to around $26,000 in the first half of June. It is still far from its all-time high of $61,000, but there seem to be more positive indicators than negative.
Standard Chartered Bank recently raised its forecast, saying that bitcoin could rise to $50,000 by the end of this year and up to $120,000 by the end of 2024. Other analysts such as those at Matrixport and Berenberg Bank have also raised their forecasts. And adherents of technical analysis also expect a major breakout soon.
It has been suggested that Bitcoin is currently at the beginning of the 4-year cycle linked to its halving, so we might see a similar picture as in recent cycles.
From exchanges to wallets
Goldman Sachs reported that the supply of bitcoin on exchanges fell last month, reaching the low levels of December 2022 (which were themselves the lowest since November 2020). While this could be the result of recent uncertainties and regulatory pressure on exchanges, it could also be a sign of positive price expectations ahead of the halving.
Besides this, the supply of BTC that remains unmoved for more than a year has reached an all-time high of nearly 70%. This suggests that many BTC owners are long-term holders. And as we Observed, the number of wallets holding under one bitcoin has reached an all-time high according to Glassnode, an overall positive indicator for a speculative asset.
Bitcoin mining difficulty reached an all-time high on July 12 and miners continue selling off BTC rewards. The total monthly BTC inflows from miners to exchanges almost doubled in June compared to May.
In general, increased miner transfers are often considered to represent confidence in bitcoin's price prospects. Their profitability is tied to bitcoin's price and they start selling only when they feel the market is strong enough to absorb extra supply.
Miners took advantage of the cryptocurrency’s favorable market. In less than a year's time, the next Bitcoin halving will reduce their rewards, which might lead to the capitulation of weaker miners.
Bitcoin ETF’s and institutional interest
BlackRock and other companies have recently filed applications with the U.S. SEC to launch exchange-traded funds (ETFs) backed by Bitcoin.
A Bitcoin ETF is an exchange-traded fund that invests primarily in assets related to Bitcoin. ETFs sell shares to investors on the open market, and use the proceeds to build a portfolio of assets based on a market index, a stock market sector or another asset class. e.g. crypto.
A Bitcoin ETF from the world's biggest asset manager could attract more conservative investors who have been reluctant to buy the perceived high-risk cryptocurrency directly. This would mean that they won’t have to go through setting up wallets and/or dealing with crypto exchanges. It would also mean “traditional” investors would be able to invest in a regulated crypto product. This will further strengthen the position of BTC. Spot bitcoin ETF trading was first suggested in 2013 but has never received the authorities’ approval in the U.S.
The increasing interest of institutional investors is also evidenced by an increased number of crypto custody initiatives as well as by the recent entry of Wall Street giants into the crypto exchange market.
To sum up, we Observe optimism from key Bitcoin market players and a potential influx of institutional investors while hodlers and the general community sit tight in anticipation of the original cryptocurrency's next Super Bowl event.