Bitcoin Hits New All Time High on March 5th, March 7th and again on March 11th 2024

Driving factors for the new all-time high

There are a few factors driving Bitcoin’s current record high prices. At the moment, the Halving is absolutely fueling this trend, and the latest Bitcoin exchange traded funds have also boosted both exposure and demand for the king of Cryptos. Let’s take a bit of a more detailed looked at both of these.

Halving

Halving happens around every four years, which roughly equates to 210,000 blocks, and is Bitcoin’s anti-inflation mechanism, by artificially creating scarcity. They do this by halving the amount of BTC awarded to miners for every block of validated transactions added to the blockchain. And like clockwork, every time this has happened it has caused a surge in the price of BTC. The dynamics and reason behind this is very simple to understand. Essentially what happens is the supply of BTC is cut in half, but the people that want it doesn’t. More demand and less supply is almost always guaranteed to make the value of an asset skyrocket. A bit of a heads up, though: the effect isn’t immediate; it usually takes between a year and a year and half for the halving to be priced in. The first time a halving was committed, in November of 2012, BTC price was $13. By November 2013 though, it had practically hit the moon at $1,100. Also, keep in mind that currently, there are whales that manage Spot Bitcoin ETFs that may have priced in the halving into their calculations.

BTC Spot ETFs

Spot Bitcoin ETFs are managed funds that hold assets and allow clients to trade the price of said asset without the obligation actually to own it. These Bitcoin ETFs are available to trade on most mainstream exchanges, not just a Crypto exchange, Coinbase, for example, and are regulated by the Securities and Exchange Commission, giving an added security layer. But this also puts huge amounts of BTC in the hands of big brokers like Blackrock, which offer Spot Bitcoin Exchange Traded Funds, increasing the chance of moves made by algorithmic and automated trading (which many of these brokers use).

Bitcoin all-time highs so far – Bitcoin price history

The first BTC Crypto rally happened very early on when it jumped from a conservative $0.09 in 2011 to an astounding $26.90, marking a 2960% increase. In 2013 the Crypto saw its highest price yet, hitting an almost unbelievable (at the time) $1238. After a cool off, it climbed year over year, reaching $20,000 in May of 2019. After dropping slightly, it added 416% to its value in 2021 almost reaching $30,000. Later that year, it almost touched the $70,000 point and of course most recently also approached that mark. In retrospect and considering we’ve already seen these movements, each saw a striking distance from their previous high making it one of the World’s largest Crypto…in fact it made it the world’s biggest gaining asset in all of history.

Market reactions to Bitcoin’s new all-time high

As expected, the market lost their mind over the news that BTC was once again approaching the $70,000 level. For some, it was shocking for others it was a confirmation of the assumption that BTC is likely going to reach the unicorn level of $100,000.

Additionally, BTC public mainstream exposure was springboarded by the ETFs ‘hype’ after many of the asset management companies announced the unbelievable amounts of Bitcoin assets under management. It also made all the Crypto skeptics question their assumption that BTC was another bubble or hype-inflated asset.

Institutional and retail investor response

Since the launch of ETFs, Wall Street investors have been looking at Crypto in a completely different light. Cryptos and Bitcoin can now be considered completely valid additions to any portfolio. And retail investors now access Cryptos on main stream exchanges.

Impact on Crypto-related Stocks, ETFs and companies

Obvious this latest rally has been extremely beneficial to all providers both within the Cryptocurrency space and the ETF space. On the news of the new high, many exchanges saw an uptick of traffic and of course brokers that offer Bitcoin ETFs saw the assets they manage grow in value exponentially.

Bitcoin’s growth compared to other assets

Bitcoin vs traditional investments

One of the highest growing Stocks over 10 years only saw an 83.80% increase (Waaree Renewab.). Bitcoin on the other hand has experienced a 17429.42% increase since 2014 highs until today. I doubt any further comparison is necessary.

Emerging trends in Crypto investment

The Bitcoin ETFs were only the beginning. Now that the financial industry has accepted Cryptocurrencies’ viability, there are bound to be other mainstream investments based on Cryptos. Networks that allow smart contracts , including Bitcoin, are also offering alternatives to mainstream banking and investment services via DeFi solutions.

Future outlook for Bitcoin and the Cryptocurrency market

Expert Bitcoin price predictions and analysis

Bernstein analysts are suggesting that Bitcoin could ascend to dizzying heights of $150,000 by 2025. They attribute this projected surge to the influx of institutional capital facilitated by spot ETFs, coupled with Bitcoin’s forthcoming halving. This cycle, they predict, may peak in 2025 rather than the commonly anticipated 2024.

The concept of the halving, intrinsic to Bitcoin’s code, serves as a mechanism to ensure its scarcity and resistance to inflation. Occurring roughly every four years or after every 210,000 blocks, it slashes the rate of new Bitcoin issuance by half until the finite supply of 21 million Bitcoins is exhausted, anticipated around the year 2140.

Morgan Stanley echoes the optimism, suggesting that the Crypto winter may be thawing, paving the way for a Crypto spring. Their analysis points to Bitcoin’s historical trends, indicating that significant gains often follow halving events, suggesting that brighter days may lie ahead for the Crypto market.

JPMorgan‘s latest report casts a shadow of doubt on the exuberance surrounding ETFs. They caution against expecting a substantial influx of new capital into the Crypto market, arguing instead that existing capital may simply shift from other Bitcoin investments into the newly-approved spot Bitcoin ETFs.

Innovation and adoption of BTC

As mentioned above, numerous factors are fueling Bitcoin’s adoption, primarily institutional interest and the relatively new exchange-traded funds. Regarding innovation, most Cryptocurrency networks are constantly looking for ways to add functionality and the ability to scale their networks, which will inevitably benefit investors.