This is the ‘Magic Key’ that can make Bitcoin go to the moon, what is it?
NewYork – Bitcoin price consolidation continues to occur today, Friday (31/5/2024). This shows that there is not yet strong enough demand amidst the positive sentiment that has occurred in the first semester of 2024.
Reporting from Refinitiv, bitcoin was at US$68,440 at 06:27 WIB. This figure is slightly lower compared to the closing of trading yesterday (30/5/2024) which was at US$68,469.
Bitcoin consolidation has occurred at least since mid-March 2024 until now. Bitcoin price movements have ranged between US$57,000 to US$72,000 in the last 2.5 months.
Bitcoin Movement (US$)
Various positive sentiments that currently exist, such as US exchange-traded funds (ETFs) bitcoin spot and the bitcoin halving, have not been able to provide the impetus that ultimately caused the price of bitcoin to penetrate the US$74,000 level.
Previously in January 2024, a spot bitcoin ETF was approved by the US Securities and Exchange Commission (SEC).
The SEC has officially approved 11 spot bitcoin ETFs for trading, such as Blackrock’s iShares Bitcoin Trust (IBIT), ARK 21Shares Bitcoin ETF (ARKB), WisdomTree Bitcoin Fund (BTCW), Invesco Galaxy Bitcoin ETF (BTCO), Bitwise Bitcoin ETF (BITB ), VanEck Bitcoin Trust (HODL), Franklin Bitcoin ETF (EZBC), Fidelity Wise Origin Bitcoin Trust (FBTC), Valkyrie Bitcoin Fund (BRRR), Grayscale Bitcoin Trust (GBTC), and Hashdex Bitcoin ETF (DEFI).
The approval of a spot bitcoin ETF represents an important milestone in the world of finance, signaling a major shift in the perception and utilization of bitcoin as a primary investment asset.
“The approval of a Bitcoin ETF has huge implications for US investors because they can now hold crypto in their brokerage accounts, something they couldn’t do before,” Timo Lehes, co-founder of blockchain company Swarm Markets.
About two weeks after the approval of the spot bitcoin ETF, bitcoin prices began to rally from early February to March 13 2024 or within 1.5 months.
Furthermore, in April 2024, the bitcoin halving, which is a four-yearly event, occurred but did not immediately raise the price of bitcoin itself.
Previously, the bitcoin halving occurred at around 7 am WIB on April 20 2024. After this event, the price of bitcoin experienced a slight increase considering that at the moment of the bitcoin halving, the price of BTC was around US$63,000-US$64,000.
This halving moment does not immediately cause the price of bitcoin to fly significantly, but market players believe that in the next 12-18 months, bitcoin could experience appreciation.
This happens because historically in the three previous halvings, bitcoin experienced a significant increase.
Of note, after the halvings in 2012, 2016, and 2020, the price of bitcoin rose approximately 93x, 30x, and 8x respectively from the price to its cycle peak.
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So what are market players waiting for?
CNBC Indonesia Research noted that one of the crucial things that is thought to be able to lift the price of bitcoin is the cut in interest rates by the US central bank (The Fed).
The Fed’s interest rate is currently at 5.25-5.50% and until now there has been no clear tendency from Fed officials to switch to dovish followed by a reduction in interest rates.
Reducing interest rates is important and awaited by investors because it will have a positive impact on risk assets, one of which is crypto.
Bitcoin benefits from low interest rates and increased market liquidity, which can lead to better sentiment and greater investment in emerging assets.
For example, when the Fed’s interest rate increased at the end of 2017 to 2018, from 1.25% to 2.5%, the price of bitcoin was observed to experience a sharp decline from around US$16,000 to US$3,458.
Likewise, when the Covid-19 pandemic hit the world, the Fed tried to cut interest rates drastically from 1.75% to 0.25% and held them at that level for quite a long time, namely around two years.
At that moment, the price of bitcoin was observed to soar from around US$5,361 to a position of more than US$62,000 or an increase of more than 1,000%.
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