Key highlights:The big institutional players just can't get enough - firms like Grayscale and BlackRock keep pushing the SEC for a Bitcoin ETF. Potentially hundreds of billions flooding into the market. It seems like everyone's stashing their coins for the long haul lately. Over 70k Bitcoins left exchanges since last month, and long-term holders are at an all-time high
The price of Bitcoin (BTC) has been on the rise lately, going above $30,0000 recently and reaching a two-month high. There are several key factors contributing to this latest Bitcoin price increase.
First, institutional interest in Bitcoin continues to grow. Major firms like Grayscale Investments and BlackRock have filed new applications for spot Bitcoin exchange-traded funds (ETFs).
Grayscale submitted an application with the SEC to list shares of its Grayscale Bitcoin Trust on the NYSE Arca exchange. This is part of its ongoing effort to convert the trust into a spot Bitcoin ETF.
Similarly, BlackRock filed an updated prospectus for its proposed Bitcoin ETF. This comes as a likely response to address SEC comments, just as other Wall Street giants like Ark and Fidelity have done.
The rush of spot Bitcoin ETF filings in mid-October has boosted market sentiment, helping keep the Bitcoin price above $28,000 despite macroeconomic challenges.
Countdown of BTC Block Generations
The Bitcoin halving cycle
Another driver of the recent Bitcoin price gains is growing hype around the upcoming Bitcoin halving.
Bitcoin’s supply is reduced by half every four years through the halving. Miners receive fewer BTC rewards for verifying transactions, constricting new supply.
Many analysts predict the BTC 2024 halving will lead to a new Bitcoin bull run, just as previous halvings have. As Capriole Investments noted, most of Bitcoin’s historical returns occurred in the 12-18 months after each halving event.
Tradingview – SDPR Gold Trust
If a Bitcoin ETF is approved, it could provide a liquidity boost of up to $600 billion in new demand. A recent report suggested gold instantly rose 350% when its ETF was approved.
Reduced BTC supply on exchanges
At the same time, the amount of Bitcoin on exchanges continues to decline. Exchanges have shed over 70,000 BTC since the September peak.
When coins leave exchanges, it's generally perceived as bullish. It likely means traders are withdrawing Bitcoin to hold in self-custody long-term.
On October 19, long-term Bitcoin holders reached an all-time high of 76% of total supply. This reduced exchange supply makes BTC price more susceptible to liquidations.
Over $10 million in BTC shorts were liquidated in the past day alone. The majority came in just a 12-hour period.
Improving market sentiment
These upbeat factors have begun shifting market sentiment from fear to neutrality. The Bitcoin Fear & Greed Index has climbed 7 points in a week.
Between the ETF applications, halving hype, exchange outflows, and liquidations, Bitcoin has regained some bullish momentum. That’s why the price has been trending up over the past week.
Major players like Coinbase are now confident the SEC will finally approve a Bitcoin ETF in the near future. The regulator’s recent court loss to Grayscale indicates they may no longer have grounds to deny spot Bitcoin ETFs arbitrarily.
While the SEC ultimately has final say, the stage appears set for new spot Bitcoin ETFs to be approved soon. If so, it would give the cryptocurrency significant exposure to mainstream investors for the first time ever.
Check out related article: Bitcoin Price Prediction After Halving 2024