Bitcoin, the largest digital asset, is set to achieve its longest winning streak since the pandemic-era rally, marking a fifth consecutive month of gains according to Bloomberg data. As the cryptocurrency landscape experiences notable shifts, including the launch of spot Bitcoin ETFs and anticipation surrounding the Federal Reserve’s interest-rate decision, Bitcoin enthusiasts are buoyed by optimistic projections, with some predicting valuations soaring to new heights post the upcoming 2024 halving event.
January has witnessed Bitcoin’s resilience, with a 2% increase in value, extending its winning streak. The ongoing positive momentum, if sustained, would mark the longest streak since the six-month surge from October 2020 to March 2021. Notably, this performance follows the launch of spot Bitcoin ETFs, including offerings from financial giants BlackRock Inc. and Fidelity Investments, on 11 January.
The anticipation surrounding these ETFs was palpable, with Bitcoin surging nearly 160% in the lead-up to their introduction as investors speculated on their potential to attract new market participants. However, following their debut, Bitcoin experienced a 12-day drop of approximately 21%, causing some concerns in the market. One significant player affected was the Grayscale Bitcoin Trust, which converted into an ETF format on 11 January. Although investors initially withdrew funds, the pace of withdrawals has slowed, signalling a positive turn in market sentiment.
The broader impact of these developments is reflected in the net inflow of $1 billion into the 10 ETFs overall. This success in both trading and flow metrics has positioned these ETFs as having the most successful launch in history. As the market awaits the Federal Reserve’s interest-rate decision, the potential for a cut in March is being closely watched, given the impact it could have on Bitcoin and the broader crypto markets, which are known for their sensitivity to changes in sentiment and liquidity perceptions.
The positive sentiment surrounding Bitcoin is further fuelled by optimistic projections from key figures in the cryptocurrency space. Anthony Scaramucci, the founder of Skybridge Capital, is among those forecasting substantial gains. Scaramucci predicts that Bitcoin could reach at least $170,000 within 18 months following the upcoming halving event in April. He said in a recent podcast:
“The day that Bitcoin halves, multiply it by four and 18 months later and it’s been uncanny that that’s been the price of Bitcoin.”
The halving, which occurs approximately every four years, involves a reduction in the rate of new Bitcoin entering circulation, impacting the overall supply, and potentially influencing the market dynamics. Past Bitcoin halvings have been associated with price surges, capturing the attention of investors and enthusiasts alike as they eagerly await the potential effects on the cryptocurrency’s value and market dynamics.
Historical data supports Scaramucci’s projection, with Bitcoin often quadrupling in value within the 18 months following previous halvings. Even a conservative pre-halving estimate of $50,000 could imply a post-halving price tag of $200,000, according to Scaramucci.
Scaramucci is not alone in his bullish outlook. Blockstream CEO Adam Back and analysts at Standard Chartered Bank also project Bitcoin to surpass $100,000 post-halving. Moreover, in the long run, mega-bulls like Scaramucci envision Bitcoin capturing half the market cap of gold, potentially lifting its value over $300,000 per coin.
Bitcoin’s journey through January, marked by a sustained winning streak and the successful launch of spot Bitcoin ETFs, reflects the cryptocurrency’s resilience and ability to adapt to evolving market dynamics. As the Federal Reserve’s decisions and the 2024 halving event loom on the horizon, the cryptocurrency community remains optimistic about Bitcoin’s future, with projections of substantial value increases gaining traction.
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