Bitcoin’s price took a dive from recent all-time highs of over $70,000. The flagship cryptocurrency briefly dipped below $63,000 before rebounding to $64,780 at the time of this writing.
But data suggests the dive isn’t exactly what it seems at face value.
Investors are moving their Bitcoin out of big exchanges and into cold wallets. New wallet address creation is typically seen as a sign that the owner plans on holding for the foreseeable future.
Experts say traders are preparing for more upside price action. This sentiment is supported by an analysis by data aggregator Cryptoquant.
Mandy Williams, a reporter for Cryptopotato, talks about the possibility of the “second leg of the bull cycle” which is anticipated toward the end of 2024.
Meanwhile, new Bitcoin addresses have surged 35% since June, suggesting that the crypto community may be hodling Bitcoin long term. The word “hodling,” is a cryptocurrency community term that stands for “hold on for dear life.”
Launch of the Bitcoin ETF
Reviewing Bitcoin price action over the past few months suggests more upside action in the months ahead. General consensus among crypto analysts and prevailing investment theories is that the approval of Bitcoin ETFs has been the catalyst for the bull run since the beginning of the year. Bitcoin is up over 112% over the last 12 months as of the time of this writing.
Bitcoin enthusiasts waited a long time for the SEC to green light a Bitcoin ETF, complete with rigorous lobbying and several setbacks in the process. The SEC approved the first Bitcoin ETFs, filed by WallStreet kingpins Fidelity, Blackrock and crypto mainstay Grayscale, in January 2024. Public confidence in the longevity and viability of Bitcoin as an investment asset is bolstered by the backing of these legacy institutions.
An exchange traded fund (ETF) is an equity comprised of several underlying assets. Through ETFs, investors can get in and out of the market within a single market day. ETF trading and liquidity functions much like an individual stock does.
ETFs can be composed of a range of assets, from commodities to crypto and beyond. Bitcoin ETFs allow investors to dip their toes into the crypto market while mitigating the volatility risk it is known for. Like stocks, ETF shares can be easily traded on brokerage exchanges.
Proponents Bitcoin ETFs lobbied for their approval for years. Still, the SEC was slow to grant approval. Now, investors have tools that will track Bitcoin’s fundamentals, which led to a growing appetite in the crypto market.
Bitcoin in the Spotlight
Since the Bitcoin ETFs’ approval, Bitcoin’s price popped from around $40,000 to over $60,000 — a 50% increase in under 6 months. It has found support around $60,000 ever since.
On its first day of exchange trade, Bitcoin ETFs saw $4.6 billion in trade volume, adding $600 million to Bitcoin’s market cap. Bitcoin’s current market cap is just over $1.2 trillion at the time of this writing.
The Bitcoin ETF approval coupled with celebrity endorsements and other bullish indicators attracted mainstream attention.
Ex-President and current GOP nominee Donald Trump spoke at a July 29 Bitcoin Conference in Nashville, Tennessee.
“If crypto is going to define the future, I want [it] to be mined, minted and made in the USA. If bitcoin is going to the moon … I want America to be the nation that leads the way.”
Donald Trump at the 2024 Bitcoin Conference
Shortly after, the presidential candidate promoted limited-edition Bitcoin and Trump themed sneakers on Truth Social. Buyers can pay for the sneakers using Bitcoin or other types of cryptocurrencies.
Regardless who moves into the White House in January 2025, Trump’s speech at the Bitcoin Conference is a bullish indicator of Bitcoin’s growing popularity and importance to the public.
Related: Trump Debuts Bitcoin Themed Sneakers After Bitcoin Conference
Impact of the Bitcoin ETF on the Cryptocurrency Market
After the record-breaking success of the Bitcoin ETF’s debut, Fidelity and Blackrock filed paperwork for an Ethereum, the second largest cryptocurrency by market cap, ETF.
The SEC approved the Ethereum ETF on May 23 and trading began on July 23. Ethereum cleared $1 billion on its first day of trading, adding $100 million to its market cap. Ethereum’s current market cap is just over $378 billion at the time of this writing.
Bitcoin and Crypto’s Future Price Action
The confluence of Bitcoin’s debut on Wall Street, presence in the political discourse at the highest levels, and growing number of holders all suggest a bright future for Bitcoin and the cryptocurrency market at large.
Moreover, Bitcoin’s 4-year halving cycle just came to a close in late April. Historically, BTC touches new all time highs between 10-20 months after the end of a mining cycle.
There will only ever be 21 million Bitcoin. Nearly 19.8 million of those have been mined and are already in circulation. Fewer Bitcoin get mined each cycle, making it an inherently deflationary asset.
No Fake Bitcoins
Part of growing interest in Bitcoin from financial institutions is that since its 2009 debut, the simple blockchain algorithm has been “unhackable.”
Scams have plagued the cryptocurrency space since its inception. However, they are typically rooted in getting victims to send their crypto under false pretenses, hacking insecure wallets or exchanges, or the exchanges themselves perpetuating the fraud. The 2022 implosion of FTX occurred because the crypto exchange taking customer money without actually buying real Bitcoin. When prices starting running upwards, the exchange became insolvent.
Still, no one has ever successfully counterfeited Bitcoin.
Challenges still lie ahead. Regulation could present obstacles to the viability of the cryptocurrency market, which threatens the U.S. dollar’s positioning as the global reserve currency.
But Bitcoin has been gaining political supports in recent years, which minimizes the probabilities of that happening.
Related: California DMV Moves 42 Million Car Titles To Blockchain
