- Market optimism, driven by expectations around the FOMC minutes and speculations of a Bitcoin Spot ETF, contributes to the prevailing positive market momentum.
- Analysts explore the potential impact of a Bitcoin Spot ETF approval, emphasizing the unique dynamics.
In recent developments, Bitcoin has faced challenges, experiencing a dip to $36,924 from strong support at $38,500, marking a 1.1 percent decrease in the last 24 hours. The retracement was initiated after the leading cryptocurrency reached a peak of $38,400 over the weekend.
Despite the recent pullback, the Crypto Fear and Greed Index on CoinMarketCap currently sits at 71/100, indicating a “greed” sentiment among investors. Notably, crypto leaders are expressing confidence in Bitcoin’s potential for a rebound.
The current trend in the cryptocurrency market is upward, fueled by investor optimism surrounding the forthcoming Federal Open Market Committee (FOMC) minutes. Furthermore, speculations regarding the potential approval of a Bitcoin Spot Exchange-Traded Fund (ETF) and other related events contribute to the ongoing positive momentum in the market.
Markus Thielen, Head of Research at DeFiResearch.com, shared insights with Yahoo Finance regarding the potential impact of the approval of a Bitcoin ETF on the cryptocurrency space. Thielen highlighted the substantial investments, approximately $120 billion, made by investors in precious metals ETFs in the US, which primarily hold gold and silver.
According to Thielen, reallocating just 10 to 20 percent of these investments into Bitcoin has the potential to bring in around $25 billion. Based on their analysis, each additional $1 billion in investments could influence the price by approximately 4 percent. Consequently, Thielen suggested that this scenario might lead to a price surge approaching $57,000 for Bitcoin.
Will Bitcoin ETFs Be A Game-Changer?
Marcus discusses the imminent launch of a spot Bitcoin ETF, anticipating a significant catalyst for Bitcoin’s growth. Notably, previous ETF introductions in other regions did not trigger substantial market rallies.
The distinctive factor this time lies in the United States, possessing the largest liquidity and serving as the base for most ETFs. While attempts to establish ETFs in Asia have been ongoing, their reception has been relatively subdued, possibly due to differing investor behaviors between the US and other regions.
Thielen underscores the substantial influence of institutions in the United States, particularly in their extensive use of ETFs within asset allocation strategies. With the registered financial advisor community overseeing trillions of dollars, even a modest shift, say around $50 billion, towards Bitcoin could exert a noteworthy impact, according to Thielen.
In the midst of discussions about Bitcoin’s future trajectory, economic expert and investment manager Dan Tapiero expressed optimism about the cryptocurrency’s value in the upcoming bull run. Contrary to some forecasts placing Bitcoin between $500,000 and $1 million in the next decade, Tapiero holds the view that it could reach around $100,000 in the coming years.
With the current price below $40,000, Tapiero anticipates a threefold increase during the next bull run, projected to occur in 2025. During this period, he envisions Bitcoin surpassing $100,000, signaling a potential upward trend for the cryptocurrency.
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