According to U.Today, Charles Edwards, the founder of Capriole Investments, has shared his insights on why Bitcoin, the world's leading cryptocurrency, has not yet reached the $100,000 mark. He also outlined the key factors that could potentially drive the price of Bitcoin upwards in the coming months.
Edwards initiated a discussion on a social media platform, questioning why Bitcoin hasn't hit the $100,000 price point despite the launch of spot Bitcoin ETFs. He noted that Bitcoin has only increased by 50% since January when the SEC approved the ETFs, leaving many to wonder why the cryptocurrency hasn't surged higher. At the time of his discussion, Bitcoin was trading slightly above $71,000.
Edwards identified several key factors that could potentially drive a strong rise in Bitcoin's value in the future. Firstly, he pointed out that the market is currently battling against long-term holder selling. He noted that the number of long-term Bitcoin-holding wallets, those that have held the cryptocurrency for more than two years, has dropped from an all-time high of 57% in December 2023 to 54% today. This 3% drop represents 630,000 BTC, which is 300% of the total BTC supply that Bitcoin ETFs have purchased in the U.S. since January.
The second factor, according to Edwards, is that the market has not yet fully felt the impact of the halving event that took place in April, which saw Bitcoin's daily issuance drop by 50%. He believes that over the next year, the gap between the ETFs purchasing Bitcoin and the BTC being mined will widen significantly. He also suggested that financial institutions need time to assess the situation and allocate funds for Bitcoin purchases, which is why spot ETFs are likely to remain the leading purchasers of BTC for at least this year.
In conclusion, Edwards identified three key drivers necessary for Bitcoin to start rising sharply: higher average daily ETF buying, lower long-term holder selling, and growth in U.S. liquidity.