Experts commented on the rise in Bitcoin prices

On Monday, December 4, the Bitcoin (BTC) rate exceeded $42 thousand, rising by more than 11% per day and updating the previously set annual maximum. Bitcoin last traded above $42,000 in April 2022, before the collapse of the Terra ecosystem triggered a massive crypto market crash.

Bitcoin began its meteoric rise in mid-October amid news of possible approval by the US Securities and Exchange Commission (SEC) of the first spot exchange-traded fund (ETF) for Bitcoin. In less than a month, the rate of the first cryptocurrency increased by almost $10 thousand.

Several large investment companies, including BlackRock and Fidelity Investments, are now awaiting SEC approval of their own Bitcoin ETFs. The launch of such ETFs is considered in the crypto community to be a catalyst for a new bull cycle in the market. BlackRock alone has assets under management totaling about $9 trillion. According to the analytical company Chainalysis, North America is the largest cryptocurrency market, with an annual turnover of approximately $1.2 trillion.

Interviewed “RBC-Crypto” experts spoke about the factors influencing the growth of the price of the first cryptocurrency, and about the future prospects of the entire crypto market.

“Several fundamental reasons”

Cryptocurrency market analyst Viktor Pershikov

“There are several fundamental reasons for the current increase in the Bitcoin rate: firstly, market participants factor into the price the achievement of the ceiling for tightening monetary policy (MCP), which is clearly visible in the significant growth of US stock markets and bond prices. If [мировые] Central banks such as the Fed have completed tightening, then in the future fresh liquidity may come to many markets, including the cryptocurrency market.

Secondly, expectations for the launch of spot ETFs are still bullish as investors reasonably expect the number and volume of institutional investors in crypto to increase once the Bitcoin ETF is approved and launched.

Thirdly, in terms of cycles, the fourth quarter is historically successful for the cryptocurrency market, and this year the cyclicality continues, which allows investors to count on a positive close to the year.

I believe that, due to inertia, the price of Bitcoin may try to overcome the $42 thousand level, but I proceed from the fact that the $42–45 thousand zone is the final zone for growth this year. I do not expect increased growth until the end of the year in the benchmark and believe that it is better to look for the main opportunities in altcoins. Many cryptocurrencies, unlike the market leader, have practically not grown in capitalization, despite sufficient fundamental conditions. In particular, there is ample room for growth in MATIC, DOT, SOL, ETH and some other assets.”

“There is no negative news yet”

Director of Analytics at the Shard cryptocurrency asset security platform Fedor Ivanov

“There are currently several factors driving the price of Bitcoin and other cryptocurrencies higher, including expectations of U.S. regulatory approval for spot cryptocurrency ETFs, the belief that the period of central bank interest rate hikes is over, and purely speculative interest in anticipation of next year’s halving. .

Thanks to these factors, the rise in prices of major crypto assets seems inevitable. Assuming that a large outflow of capital from the market is not expected to happen in the near future, market participants pay less attention to risks.

In general, everything looks exactly like this. The SEC is forced to negotiate over the ETF, both with Grayscale, which the regulator lost its case against in August, and with other companies that have applied to launch exchange-traded funds for Bitcoin. The market is confident that they will be given the green light at the beginning of next year: on January 10, the deadline for consideration of the relevant applications from Ark Invest and 21 Shares expires, and in March the application from BlackRock should be considered.

Inflation in the United States is declining, and even despite statements from Fed officials who say that it is not yet time to cut rates, no one is expecting them to be raised. There is no negative news yet either, and this gives investors additional confidence. The end of the year with the expectation of a Christmas rally in the markets also plays a psychological role.

In this regard, it can be assumed that the price of Bitcoin, in the absence of negative news, could reach $50 thousand, although, most likely, this will still happen next year.”

“In pursuit of the expected benefit”

Co-founder of the ENCRY Foundation Roman Nekrasov

“Bitcoin’s growth has several fundamental factors. The first is waiting for the approval of the first spot Bitcoin ETF in US history. The race to launch the instrument in the summer of 2023 has been resumed by Wall Street giant BlackRock.

Many market participants believe that the launch of a Bitcoin ETF in the United States will significantly increase the investment attractiveness of cryptocurrency for institutional investors and their money will pour into the market. Most of the participants in the crypto community are waiting for the active growth of the coin against the backdrop of the approval of the tool, since the companies that will be responsible for its launch will have to purchase Bitcoin under the ETF, which will support the rise in prices.

In addition, the Bitcoin halving is approaching, after which the rate of influx of new Bitcoins into the market will decrease by half. Bitcoin has already experienced three halvings, and each of them brought the coin to new absolute price maximums. Statistics show that Bitcoin on average reaches its absolute maximum value a year and a half after the halving. In pursuit of the expected benefit, many investors begin to purchase Bitcoin, which pushes the cryptocurrency rate up.

Among the additional positive factors is the partial resolution of the conflict between the largest crypto exchange Binance and American regulators. The danger of the collapse of the trading platform has passed, adding optimism to market participants.

Market participants are also encouraged by expectations that the US Federal Reserve will move to lower the key interest rate as the fight against inflation ends. The changes could make high-risk assets such as cryptocurrencies more attractive. The combination of all positive factors allowed Bitcoin to update its annual maximum.

From the point of view of technical analysis, a price correction suggests itself, as Bitcoin began to form the eighth consecutive “green” weekly candle. The first milestone may be the level of $38 thousand, which BTC has been trying to “stab” with candle shadows for so long. As part of continued growth, the next important milestone is $48 thousand.

Now the news background plays a huge role. According to analysts’ forecasts BloombergThe SEC will approve spot Bitcoin ETFs in early January 2024. If the forecast comes true, the market will receive additional growth incentive. If the applications are not approved, a rollback to levels prior to “euphoric” growth is likely – in the region of $30 thousand. At the same time, serious sales, unless some kind of “black swan” occurs, should not be expected.

The choice of strategy in the market now should depend on goals, knowledge and skills. For example, current levels are also suitable for long-term investors, since there is reason to assume that against the backdrop of halving the absolute maximum will be renewed. Statistics also indicate the likelihood of a revival in the altcoin market after the Bitcoin price correction.”

“Bitcoin has characteristics of both gold and stocks.”

emcd company representative. Mike Lvov

“The price of Bitcoin is being pushed up by the same factors that are driving gold up. This is a decrease in inflation rates and fears of recession in the American economy, as well as a falling dollar and escalating geopolitical tensions in the Middle East.

These factors contribute to the growth of stock markets, as well as the flow of some capital into safe haven assets such as gold. Bitcoin has features of both gold and stocks, so investors willingly include it in investment portfolios to diversify and hedge risks associated with depreciation and possible recession.

In addition, the crypto market expects the imminent approval of a Bitcoin ETF by the SEC and a new bullish cycle, which traditionally accompanies halving on the Bitcoin network.

In the coming month, we can expect Bitcoin to accelerate to the level of $45 thousand. The growth of Bitcoin will also push altcoins. Ethereum (ETH), for example, has a chance to rise to $2,350 by the end of December.

Whether cryptocurrencies can gain a foothold above these levels will largely depend on what ETF decision the SEC makes in January, when it is due to publish a final decision on several filings. If the decision is positive, it will serve as a powerful trigger for further growth. If negative, we can expect rates to roll back to the values ​​of the end of November.

Don’t forget about the upcoming halving. Its effect will support Bitcoin and is unlikely to allow it to go below $38 thousand even if regulators refuse to approve a Bitcoin ETF in the United States.”