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Bitcoin went above $50,000. It hasn’t happened for more than two years. This is a trend which, taking into account the same arrival – 17 April 2024 – of the halving (i.e. the halving of the remuneration in bitcoin in favor of miners for the validation of transactions), constitutes a fundamental step along the path of recovery by the crypto Queen.
The ups and downs
The most recent years, as we know, have been turbulent to say the least for bitcoin. After reaching a peak of around $69,000 in November 2021, the price of the cryptocurrency suffered a drastic fall during 2022. The fall was due to a mix of causes. The turbulence in the crypto world industry, including the collapse of the Earth-Moon ecosystem (algorithmic stable coin) and the scandal of the centralized trading platform FTX, certainly played a central role – although Bitcoin has always remained extraneous to it.
The Fed’s restrictive policy
Not only. The cryptocurrency, in some ways, has been a victim of her success. In the period preceding the crash, bitcoin – which had become a “super star” – entered the portfolios of traditional investors (both institutional and retail). With this, the queen cryptocurrency has become sensitive to the usual strategies of the latter. Well: the traditional operator did not know, or did not follow, the peculiar mechanisms of the socio-technological system, but rather those of institutional finance. Therefore, when we entered the “risk off” phase following the start of the rate hike by the Fed, bitcoin – valued like a hi-tech security – was sold hands down like all other other assets considered more risky.
The paradigm shift
Little by little, however, things began to change. 2023 has seen the clouds begin to lift over the crypto world. Real! The so-called “crypto winter” seemed to never end. Although bitcoin grew a lot last year, its value for several months (until October) moved within the channel composed of the lower level around $20,000 and the upper one positioned in the $30,000 area. Subsequently, the token lost all fear and began its ascent.
ETFs on the spot price on Wall Street
Why this acceleration? Even in this case the reasons are various. First of all, given the cooling of the consumer price index, there was the start of the prospect of a slowdown in the rise in rates. Certain! The bets are on as to when the Fed will start cutting the cost of borrowing. And yet it is undeniable that the peak of the squeeze is (at the moment) behind us. What’s more: a boost, especially at the start of 2024, came with the SEC’s approval of spot ETFs on the spot price of bitcoin itself. Initially – upon closer inspection – the long-awaited event implied a temporary bearish pressure on the token in the wake of operators’ focus on outflows from Grayscale Bitcoin Trust (GBTC). In other words: there has been a change in investors’ strategies regarding which instrument to use (the ETF has taken center stage) which has brought about a bit of tossing and turning. Then, however, the presence of these financial products, and of giants like Black Rock, gave a nice upward push.