In the first weeks of March, bitcoin broke all previously set price records. On Wednesday, March 13, the value of the coin exceeded $73,000, and its market capitalization approached $1.5 trillion. In ten years, bitcoin's value has grown by 107365.9%, which has never happened before in the market with any of the assets, including gold, platinum and oil. Naturally, the rapid growth of the VTS price is causing a lot of heated debates on whether the coin can set an all-time record by reaching the $100,000 mark. It can, but under certain conditions.
Despite being a highly risky and speculative instrument, bitcoin's value and ability to generate profits is astounding. In the last six months, the value of the coin has grown from $27,000 to $73,000. And there are several reasons for this. The first and most important one is the SEC's approval of applications for tradable funds on BTC and ETH. In fact, this event marked the beginning of mass adoption of cryptocurrencies among corporate and institutional investors. ETFs opened access to cryptocurrencies for those who for a long time could not officially invest in these assets due to the lack of relevant legislation. After applications from 16 major companies and funds were approved, millions of investor dollars flooded into the cryptocurrency market, leading to an unprecedented rise in the price of bitcoin. Only the bitcoin ETF from the BlackRock investment fund raised $10 billion in investments.
Such a rapid rise in the price of the asset also affected other market players. For example, miners stopped selling bitcoin in anticipation of an even greater price increase ahead of and immediately after the next bitcoin halving, while traders, on the contrary, increased trading volumes. According to the latest published statistics from Collin Wu, cryptocurrency exchanges have significantly increased trading volume, with Bitget increasing its spot trading volume by 18%, Bybit by 8%, and Binance by 7%. It is safe to say that this is not just a cryptocurrency thaw, but the market has entered a real bullish trend.
In order for bitcoin and the crypto market as a whole to continue its active growth, a few basic conditions are necessary:
Mass adoption of cryptocurrencies at the level of institutional investors. For example, the launch of new tradable funds on bitcoin and ETH. By the way, the recent fund approval on Ethereum has already led to an increase in the price of ETH token to $4000, which gave an impetus to the growth of bitcoin price and a number of assets such as SOL, TON and others. If this trend continues for the rest of the year, it is likely that we will see bitcoin at $100,000 as early as November or December.
Halving as an event. Many retail and institutional investors have been buying up bitcoin en masse in anticipation of its halving, expecting an even bigger rise in price. There are currently 50 million bitcoin holders worldwide and the majority is concentrated in the hands of institutional investors. It is quite expected that they will continue to buy up the coins ahead of the halving, pushing the price of the asset upwards.
General economic situation. Despite the fact that bitcoin is the only truly decentralized cryptocurrency, the impact of the economic situation on its price remains significant. After inflation in America and the EU began to decline, asset values began to rise. This is largely due to the improved financial situation of residents of the US, Europe and Latin American countries, which are the main consumers and holders of cryptoassets.
Political situation. The governments of the United States and the European Union have long tried to ban the circulation of cryptocurrencies in these regions, but all efforts have proved fruitless. Cryptocurrency is firmly embedded in the lives of modern people and banning the use of digital assets is like fighting windmills. Therefore, today we see a change of policy course from prohibiting to regulating. Lawmakers are trying to regulate and control the circulation of digital assets, which may give a certain impetus to the use of cryptocurrency in business.
The emergence of unforeseen situations is also possible. Among the negative factors affecting the crypto market are the upcoming trial of CZ, as well as the still unclear outcome of the US presidential election.
If after the change of leadership in the U.S. the policy is reversed, it is possible that ETFs will be closed and funds will flow out of the market, which will eventually lead to a 30-40% drop in bitcoin price.
Also, we should not rule out a massive sell-off of bitcoin immediately after the halving, which can be provoked by miners and large investors. In this case, the price of the coin may fall to $55,000 - $60,000 or even lower. In any case, you should constantly monitor the market situation and adjust your trading and investment strategies to the conditions in the financial sector and in the world as a whole.
