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Citing a report from "Securities Celestial," on December 4th, the price of Bitcoin accelerated its surge, reaching a threshold of $42,000 per coin at one point during the day, with a daily maximum increase of nearly 7%. This continued to set new highs since April 2022, more than doubling from the same period last year, with a cumulative increase of 145% for the year.
The substantial rise in cryptocurrencies, including Bitcoin, led to a large number of short positions being liquidated. According to Coinglass data, the total value of liquidations in the entire cryptocurrency futures market exceeded $300 million (approximately ¥2.1 billion) within 24 hours.
The strong upward trend of Bitcoin in recent weeks, surpassing $40,000, has also successfully driven a rebound in the prices of other mainstream cryptocurrencies such as Ethereum and XRP. Speculative players are continuing to increase.
Citing the report from "Securities Celestial," some market analysts are becoming more optimistic about the Bitcoin market outlook, possibly due to the significant price increase this year. Some analysts boldly proclaim, "Bitcoin's price will surpass $100,000 in 2024." According to data from the investment platform eToro and discussions on social media, retail investors in the United States are pouring into the virtual currency market, with a 28% increase in cryptocurrency positions on eToro's U.S. platform compared to the previous month.
Institutions are also regaining confidence, partly because Wall Street giants such as BlackRock are actively pushing for Bitcoin ETFs. Documents from the U.S. Securities and Exchange Commission (SEC) indicate that Bitcoin spot trading ETFs submitted by Wall Street giants are likely to be approved next year.
The approval of Bitcoin spot ETFs is crucial for institutions, as it means that many asset allocators and asset management companies can use ETF tools in the allocation process. These funds manage $17 trillion, and once they enter the cryptocurrency market, the potential is limitless.
Bitcoin ETFs can make Bitcoin more widely accepted and accelerate its entry into mainstream markets.
Some Bloomberg analysts on the X platform (formerly Twitter) have predicted that the window for the approval of Bitcoin spot ETFs may be in mid-January 2024. Of course, if the SEC has not approved the ETF by this time, it is also possible for institutions to withdraw their applications, but analysts believe this possibility is less than 10%.
Some voices in the U.S. market have changed, beginning to see cryptocurrencies, represented by Bitcoin, as a legitimate innovative force in the financial market. Bitcoin rising to $40,000 is a sign of a paradigm shift in the financial market.
Regardless of whether this data is correct or logical, digital assets have begun to become an important part of the traditional financial ecosystem. Various signs indicate that as geopolitical conflicts continue to escalate, Bitcoin, as a decentralized form of asset, detached from national jurisdiction, increases its investment attractiveness, but also increases investment risks.
Large institutions like BlackRock have successfully used their industry influence to shape Bitcoin ETFs as the next "rising star" of digital assets. However, although ETFs may hedge the market risks of cryptocurrencies, Three Forests believe that the entire cryptocurrency ecosystem needs sustained growth and risk resistance. Without these, the hedging capabilities are limited.
Over the past few years, the trend of cryptocurrencies has been tumultuous, and the approval of Bitcoin ETFs does not necessarily accelerate the bull market in the crypto sphere. Even if Bitcoin ETFs are approved now, adapting cryptocurrencies to a 60/40 strategy (an investment portfolio with 60% stocks and 40% bonds) still has a long way to go.
This round of Bitcoin's surge is largely based on the expectation of the approval of Bitcoin spot ETFs. However, once Bitcoin ETFs are entirely rejected, it may cause severe damage to this cryptocurrency market trend.
All is still uncertain. |
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Post time 13-12-2023 07:01:34