Crypto summer: bitcoin surpasses the US$57,000 barrier and reaches its highest value in more than two years
The most popular digital currency reaches values that have not been observed since 2021, a trend that is also reflected in ether; the factors that explain these increases
After two negative years for the cryptocurrency industry, in the last month some positive news was released for the market that ended up boosting the price of the main digital currencies. Today, both bitcoin and ether register values that have not been observed since 2021, and investors are excited...
Bitcoin, this Tuesday reaches US$57,071. This is an increase of US$3,695 during the last 24 hours, equivalent to a percentage advance of 6.9%. In the last month, it climbed 33.5% and 142% since the end of February last year.
The last time a similar value had been seen was in December 2021, after having reached a historic peak of US$64,978 in November of that same year. However, since then the price collapsed and in November 2022 it hit a floor around US$16,445, after the industry suffered strong shocks with the collapse of the Terra/Luna currency and the trial of the crypto platform FTX for fraud and money laundering.
After the bear market of 2022, characterized by a loss of confidence in the ecosystem, 2023 was a year of recovery for crypto globally. From January to December, market capitalization and processed crypto volume increased steadily. At the beginning of 2024 we were 40% below the historical maximum, reached in November 2021.
Crypto optimism is also reflected in ether, since today it reaches US$3,239, about US$96 more than 24 hours ago (+3%). It is an advance of 42% in dollars since February began. In this case, it is the highest value since April 2022, although it still seems far from its all-time high at US$4,733 in November 2021.
There are three fundamental factors that explain the reason for the revival of demand for bitcoin.
In April of this year, the fourth halving will take place, a pre-scheduled event that occurs every 210,000 mined blocks (approximately every four years). This will halve the bitcoin rewards miners receive for verifying transactions.
By April 2024, the supply of bitcoin will have already reached 93.75% of its maximum. That remaining little more than 6% will be emitted slowly over the next 80 years. Bitcoin's controlled and transparent monetary policy, as well as its free and global access, position it as one of the best long-term stores of value.
Another news that boosted cryptocurrencies was the approval of the stock exchange-traded fund (ETF) that tracks the price of bitcoin. After much expectation, this instrument was released in mid-January and allowed institutional investors to invest in this segment.
The market capitalization of the bitcoin ETF (over $39 billion) has already surpassed that of the silver ETF (over $12 billion) and is only below the gold ETF (around $97 billion in the United States).”
Another factor that explains the rise of the cryptocurrency is the cycles of the price of bitcoin. They have shown a behavior consistent with periods of sustained growth and during which they reached their historical maximums and then leveled off once they were reached. This always kicks off with the halving on the horizon.
Beyond the particularities of the crypto ecosystem, 2024 and 2025 may be favorable years for the financial market in general. Because? Because a decrease in the interest rates established by the United States Federal Reserve (FED) is expected. A favorable macroeconomic context with access to financing, added to the bitcoin halving, could not only positively affect the price of Bitcoin, but also boost the entire ecosystem.