Bitcoin (BTC) has reached a new all-time peak of $72,800. It is growing so fast that altcoins cannot keep up with Bitcoin. The gains of most cryptocurrencies still cannot compare with the surge in Bitcoin prices. The rise of BTCD has prevented the expected rapid rise in Ethereum (ETH) prices, thereby preventing altcoins from rising sharply. Since the end of last year, when it was $42,314 per coin, Bitcoin has risen by 72.25% this year, and its market value has exceeded $1.4 trillion, surpassing silver ($1.38 trillion) to become the eighth largest asset in the world by market value.
Analysts believe that the main reason for the surge in Bitcoin this year is the impact of the supply "halving". Bitcoin will usher in a new round of "halving" next month (April 2024). "Halving" refers to the halving of the reward obtained after the output of a new block. It occurs approximately every four years, and the specific time depends on the block generation speed of the Bitcoin network. This will reduce the supply of Bitcoin. It is expected that on April 23, 2024, the block reward will drop from 6.25 (BTC) to 3.125 (BTC).
The reasons behind the surge in Bitcoin:
There are three reasons behind Bitcoin breaking through $72,000.
First, the London Stock Exchange’s decision to accept applications for Bitcoin and Ethereum exchange-traded notes opened the door for the UK Financial Conduct Authority to create crypto-asset-backed exchange-traded notes for institutional investors on Monday. Subsequently, the London Stock Exchange confirmed that it will accept applications for Bitcoin and Ethereum ETNs in the second quarter of this year.
Secondly, there is insufficient liquidity in Asian markets. According to Reuters, the Bank of Japan may raise its benchmark interest rate above zero this month, which led to a 2% drop in Japan's Nikkei and Australia's ASX. Some analysts have long warned that the Bank of Japan is a major source of uncertainty in both traditional and cryptocurrency markets. However, due to the recent large influx of funds into Bitcoin spot ETFs listed in the United States, resulting in an imbalance between supply and demand, coupled with the Bitcoin halving, the market generally believes that any Bitcoin price decline is likely to be short-lived.
Finally, institutional interest in Bitcoin ETFs launched in the United States continues to grow. According to Dune data, since the launch of Bitcoin ETFs, ETF issuers have accumulated 4.06% of the current Bitcoin supply, with total on-chain holdings exceeding $56.9 billion. At this rate, ETFs are expected to absorb 8.65% of BTC supply each year.
