Bitcoin going to the Moon
After the approval of the debut Bitcoin-ETFs, many technical analysts are predicting a multiple growth of the first cryptocurrency in the coming months. The inflow of investor funds into spot funds has indeed increased interest in the asset - the price has broken the past record, rising above $ 70000. But, whether it is worth operating only with charts - let's understand in detail.
The effect of new liquidity and what to expect next
Large investors have insider information, invested in bitcoin at the start of the uptrend (shortly before the launch of ETF trading). Purchases by financial companies continue: the request volumes exceed the coin's issue rate by five and a half times (Happycoin Club data). According to the forecasts of Bitfinex and a number of experts, it is possible that the value of the asset will rise to $120000-125000 in the period from several months to six months. At the same time, fundamental factors remain unattended:
Bitcoin's capitalization is already $1.36 trillion, which reduces the effect of subsequent injections;
Summer is ahead - a period of correction and "calm" in the financial markets;
The difference between demand and issuance will inevitably create a deficit, increase transaction costs, and reduce the attractiveness of the coin.
Bitcoin's capitalization is already $1.36 trillion, which reduces the effect of subsequent injections;
Summer is ahead - a period of correction and "lull" in financial markets;
The difference between demand and issuance will inevitably create a deficit, increase transaction costs, and reduce the attractiveness of the coin.
Regulatory measures for cryptocurrencies are at the stage of development and implementation, which deters investment. Current investments should be viewed as "test" investments. Spot ETFs were able to attract significant liquidity only in the U.S. - in most countries of the world there is no such interest. Probably, the asset is already "overheated" and a correction is expected. Then there will be consolidation in the "corridor".
For the bitcoin price to reach $125,000, its capitalization should almost double. Such a huge inflow is unlikely during the overbought period and the subsequent consolidation.
If the total value of all cryptocurrencies rises to at least the level of the US stock market ($41.4 trillion), the asset in question will have the potential to appreciate up to 15 times the current price. But, if bitcoin maintains its share of the crypto market (50% of the 2.754 trillion). It is also worth making adjustments for the increasing transaction fees, to take into account the factor of development of alternative projects (on more advanced blockchains). For example, etherium cannot yet return to the highs of late 2021. Bitcoin's growth is due to fundamental reasons, but a gradual slowdown is inevitable (as well as a decrease in volatility).
A 20-30% annualized growth rate can be considered a good indicator. The tripling from the 2022 lows is a special case. The rise came from a low base. Also, analogies with the dynamics of the first years of bitcoin's existence are not correct (at that time the size of the crypto market was negligible).
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