Bitcoin has soared to a new all-time high of $100,000, defying the skeptics and rewarding the believers. What’s behind this stunning rally and how far can it go?
The perfect storm for bitcoin
Bitcoin has been on a tear in 2024, rising more than 200% since the start of the year. The cryptocurrency has benefited from a perfect storm of factors that have boosted its appeal and demand.
One of the main drivers of bitcoin’s surge is the anticipation of a spot bitcoin exchange-traded fund (ETF) approval in the United States. A spot bitcoin ETF would track the price of the underlying asset directly, unlike the existing futures-based ETFs that track the price of bitcoin futures contracts.
A spot bitcoin ETF would make it easier and cheaper for investors to gain exposure to bitcoin, without having to deal with the complexities and risks of buying and storing the cryptocurrency themselves. It would also attract more institutional and retail investors, as well as increase the liquidity and legitimacy of the crypto market.
The U.S. Securities and Exchange Commission (SEC) has been reviewing several applications for a spot bitcoin ETF, but has not yet approved any of them. However, many experts and insiders believe that the SEC will finally give the green light to a spot bitcoin ETF in 2024, following the example of Canada, which has already approved several spot bitcoin ETFs.
Another factor that has fueled bitcoin’s rally is the bitcoin halving, which took place in May 2023. The bitcoin halving is a process that reduces the amount of new bitcoins created and distributed to miners every 10 minutes. The halving occurs every four years, or every 210,000 blocks, and is designed to limit the supply of bitcoin and increase its scarcity.
The bitcoin halving has historically been a bullish event for the cryptocurrency, as it reduces the inflation rate and increases the demand for the limited supply of bitcoins. The previous two halvings, in 2016 and 2020, were followed by massive price increases in the subsequent years. The 2023 halving has been no exception, as bitcoin has reached new heights in 2024.
A third factor that has supported bitcoin’s rise is the resolution of some of the major legal and regulatory issues that have plagued the crypto industry. Two of the biggest crypto exchanges, FTX and Binance, have settled their cases with the U.S. authorities, ending a long period of uncertainty and controversy.
FTX, which was once one of the world’s largest crypto exchanges, collapsed in 2023 after its founder Sam Bankman-Fried was convicted of fraud and sentenced to over 100 years in prison. Binance, which is still the world’s largest crypto exchange by volume, agreed to pay a $4.3 billion fine and cooperate with the U.S. Department of Justice, after its former CEO Changpeng Zhao pleaded guilty to money laundering and other charges.
The conclusion of these two cases has cleared the air and removed some of the dark clouds that were hanging over the crypto market. It has also shown that the crypto industry is maturing and becoming more compliant with the rules and regulations of the traditional financial system.
The sky is the limit for bitcoin
With these positive developments, the crypto market is optimistic and confident about the future of bitcoin. Many analysts and experts have predicted that bitcoin will continue to soar in 2024 and beyond, reaching new milestones and breaking new records.
Some of the most bullish forecasts come from the executives of the crypto industry, who believe that bitcoin will hit $200,000 or even $300,000 by the end of 2024. They cite the growing adoption, innovation, and institutionalization of the crypto space, as well as the increasing recognition of bitcoin as a store of value, a hedge against inflation, and a global reserve currency.
Of course, bitcoin is not without its challenges and risks. The cryptocurrency is still volatile and unpredictable, and can be affected by various factors, such as technical glitches, security breaches, regulatory crackdowns, market manipulation, and environmental concerns. Bitcoin is also facing increasing competition from other cryptocurrencies, such as Ethereum, which is undergoing a major upgrade that could make it more scalable, efficient, and sustainable.
However, bitcoin has proven its resilience and strength over the years, overcoming many obstacles and setbacks, and emerging stronger and more valuable. Bitcoin has also established itself as the leader and pioneer of the crypto revolution, with a loyal and passionate community of supporters and enthusiasts.
Bitcoin is not just a digital currency, but a social and technological phenomenon that has changed the world and inspired millions of people. Bitcoin is here to stay, and the sky is the limit.
P.S. this story is not a financial advise so please before making any financial decision based on this story, do your own research.
