Bitcoin on the way to $100,000: What's behind the new rise of the cryptocurrency?

Lately, bitcoin has been steadily gaining momentum and attracting investors’ attention again. Will it sustain this pace, or is it just a temporary spike? What can we expect after the halving? Bloomberg and The New York Times have analyzed the situation, and we have collected the most interesting things.

Bitcoin is back at its high: what happened?

On March 5, the bitcoin rate reached a record high of $69,191.95, which became a new historical high. However, within a few hours, the price dropped sharply below $60,000, writes Bloomberg.

For crypto investors, this is a real relief after almost two years of “crypto winter” when the market was experiencing a prolonged decline. A year ago, bitcoin cost only $16,600, and since the beginning of 2024, its price has jumped by 50%. In general, over the past year, the digital asset market has grown to $2.5 trillion.

Why is bitcoin growing?

The main impetus came back in August 2023, when a US court ruling paved the way for financial companies to launch bitcoin-linked exchange-traded funds (ETFs). Now investors can invest in bitcoin without having to buy the cryptocurrency directly.

In January, bitcoin ETFs were officially launched, and it had an immediate effect. According to the NYT, more than $7.5 billion was invested in these funds in February alone, and Bloomberg even talks about $8.6 billion. Among the main players in this field are BlackRock and Fidelity Investments, which launched their own funds, which contributed to the growth of demand.

What is halving and why is everyone talking about it?

One of the hottest topics in the crypto world is halving, which is scheduled to take place in April 2024. This is the event when miners’ reward for mining bitcoin is cut in half. For the first time, miners received 50 BTC per block, but after a series of halving, this figure decreased to 6.25 BTC, and after the next one it will fall to 3.125 BTC.

Historically, after halving, the price of bitcoin has grown rapidly:

• 2012 – growth by 8000% per year.
  
• 2016 – an increase of almost 1000%.
  
• 2020 – a year after halving, bitcoin reached a record-breaking $69,000 at the time.

According to forecasts by Bloomberg Intelligence and Matrixport, halving could raise bitcoin’s price by another 81%. But there are also skeptics who point out that the market is influenced not only by halving, but also by general economic trends and regulation.

Will bitcoin continue to grow?

ETFs have attracted a new wave of investors to the crypto market, and this has become an important growth factor. But not all experts believe in the long-term effect.

Stephan von Genisch of OSL SG Pte believes that the bitcoin price will fluctuate around $60,000. At the same time, the NYT notes that the current crypto boom is different from the peak of 2021:

• 2021 – a boom due to a wave of retail investors during the pandemic.
  
• 2024 – growth due to large financial institutions that launched ETFs.

Michael Anderson of Framework Ventures agrees that institutional investors are now playing a key role in the bitcoin movement.

Regulators are not asleep: will they stop the growth?

Despite the growth of bitcoin, regulators remain hostile to the crypto industry. After the collapse of FTX in 2022, the US Securities and Exchange Commission (SEC) took on crypto companies:

• filed lawsuits against Coinbase and other major players;
  
• Future court decisions may have a significant impact on the entire market.

If regulation is tightened, it could make it difficult for cryptocurrencies to grow further in the US.

$100,000 – reality or fantasy?

Crypto supporters are confident that this is just the beginning, and bitcoin will break the $100,000 mark. However, whether it really gets there depends on ETFs, halving, and regulatory decisions.

One thing is clear: Bitcoin is back in the spotlight and the coming months will be crucial for its future.