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  • Bitcoin’s price surged to its highest level in two years, nearing its all-time peak, boosted by institutional investments and ETF approvals in the US.
  • Analysts predict further price surges for Bitcoin, especially with the upcoming halving event in April 2024, although some caution about potential market volatility.

In recent trading sessions, Bitcoin rose to over $64,000, its highest level in two years, and almost back to its previous all-time high. This positive trend follows large inflows of investment, the US government’s recent approval of spot exchange-traded funds (ETFs), and the excitement surrounding the April 2024 halving event. 

ETF Approval Propels Bitcoin Towards Record Territory

The US government’s recent approval of spot exchange-traded funds (ETFs) has buoyed market sentiment for cryptocurrencies. Standard Chartered, a multinational bank, has revised its Bitcoin price forecast upwards, projecting a range between $100,000 and $120,000 by the end of 2024.  In addition to predictions that Bitcoin will hit $50,000 by year’s end, this bullish attitude is supported by rising profitability for Bitcoin miners. Bitcoin has been steadily increasing in value due partly to the approval of ETFs, especially in the United States, which has drawn large institutional investments.

With billions of dollars flooding the market through recently authorized spot Bitcoin ETFs, institutional interest in Bitcoin is only increasing. As reported by Crypto News Flash earlier, ten actively traded ETFs have seen significant inflows out of the eleven that the Securities and Exchange Commission (SEC) approved in January. Now, over 300,000 Bitcoins worth over $17 billion are managed collectively by these ETFs, accounting for about 1.5% of all Bitcoins. Institutional interest in Bitcoin is further supported by well-known digital currency asset management. Grayscale owns a sizeable portion of the cryptocurrency. 

Anticipation Builds for BTC Halving Event

About every four years, a Bitcoin halving event has a big impact on the price and dynamics of the market. Every time a BTC halving event occurs, the demand to mine new blocks is cut in half. This essentially lowers the number of new coins entering the market and affects their supply.

Bitcoin halvings in the past have signaled significant price increases. The price of Bitcoin increased eightfold after the 2012 halving and thirtyfold after the 2016 halving. Interestingly, Bitcoin’s price increased by more than 600% in the 16 months following the 2020 halving. 

With the forthcoming halving of Bitcoin, many analysts and experts believe the cryptocurrency’s price will rise to new all-time highs. By the end of 2024, forecasts indicate a rise of at least $130,000. Not everyone, though, is as optimistic as this.

Citing earlier statements from Crypto News Flash, JPMorgan predicts that following the halving, the price of Bitcoin would fall to $42,000. Despite the differing views, it is expected that the halving event will substantially impact the price of Bitcoin and the market dynamics.

For those who don’t know, the halving event keeps Bitcoin rare and limits price inflation. The halving emphasizes Bitcoin’s scarcity and is consistent with its deflationary ideals by lowering mining rewards from 6.25 Bitcoins per block to 3.125 BTC.

The limited supply mechanism of Bitcoin is built on this scarcity-based paradigm, which guarantees that there will only ever be 21 million BTC in use. At the time of writing, the market capitalization of Bitcoin is more than $1.2 trillion, with its current price of $64,881.

 


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