Bitcoin Has Crossed the 40-Thousand-Dollar Mark!

Bitcoin, the most famous and popular cryptocurrency, crossed the $40 thousand (€38 thousand) price mark again last night (Sunday to Monday) after more than 18 months. Bitcoin has risen by more than 5% in the last 24 hours alone and is up more than 150% since the beginning of the year.

Spot ETFS as Early as January?

The price of Bitcoin is mainly being driven up by optimism around the potential approval of a spot ETF in the United States. In total, up to 13 companies are applying for spot ETFs in the US, including BlackRock, the world’s largest institutional asset manager with up to $9 trillion in assets under management.

According to Bloomberg analysts, the probability of approval for a spot BTC ETF is at around 90%. The SEC has to make a decision on the application from Ark Invest as early as January 10, with no possibility of further delay in its decision. Analysts also predict that if the SEC were to decide to approve a spot ETF in early January, it would likely approve multiple applications at once so that no one company would find itself at a time advantage over the others.

Halving Already in April Next Year

Historical halving events in the past have had a significant impact on the Bitcoin price. After the first halving in 2012, there was a significant spike where the price of BTC shot up from $12 to nearly $1,000 over the next 18 months. After the second halving in 2016, it was similar, with the price of BTC climbing to around $20,000 in 2017. Roughly 18 months after the last halving in 2020, Bitcoin reached its all-time high of $69,000.

As early as April 2024, Bitcoin is due for another halving, when the reward for mining a block will be reduced from 6.25 BTC to 3.125 BTC. It is important to note that past performance and investor behaviour is by no means a guarantee of future results, as investor behaviour is generally very unpredictable. However, as the amount of newly mined BTC decreases after each halving, the amount of BTC available for sale steadily decreases. This scarcity may manifest itself in situations where demand significantly exceeds the supply, which may be reflected in price growth.

Fed Likely to End Monetary Tightening

From the rhetoric and behaviour of Federal Reserve (Fed) officials, it can be assumed that the cycle of monetary tightening in the form of interest rate hikes is probably already at an end. The year-on-year inflation rate, as measured by the CPI ( Consumer Price Index ), reached 3.2% in October and is currently on track to reach the Fed’s target of around 2%.

Analysts from leading financial institutions point out that a halt and possible reduction in interest rates in 2024 could have significant implications for the global financial market. Falling interest rates cause increased demand for riskier assets, as yields on government bonds or traditional savings products typically fall as rates fall. Investors are therefore forced to seek higher yields in riskier assets, which could again cause demand for stocks or cryptocurrencies.

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