Since the debut of Bitcoin’s new ETF, the cryptocurrency market has grown tremendously, with the cryptocurrency reaching an all-time high. Halving, supply shock, flexible central bank policies, reflexivity, and demand shock all play a role in this. Recently, the price has dropped by 0.85% in the last 24 hours. However, despite the impending halving, opinion toward the currency remains positive.
A solid 33 days remain until the fourth halving, effectively cutting Bitcoin’s block reward from 6,25 to 3,125, increasing scarcity and driving up the price. Bitcoin is reaching a similar UTXO shift to 2021 when the 6M-12M band reached the 12M-18M band. The spot ETF market acts as a demand shock for the asset class, whereas Bitcoin’s halving represents a supply shock.
According to Bitwise data from Monday (11.3), miners created 881 new bitcoins, while spot ETFs acquired 14,706 bitcoins. These figures show that the daily supply of bitcoin is around seventeen times insufficient to meet demand, causing the currency’s price to skyrocket.
Several analysts predict that the Federal Reserve will make an adjustment to central bank policy. Andreas Steno Larsen identified the persistent rise in US liquidity that shows no sign of abating in his market analysis on Monday. Larsen asserts that quantitative easing influences the digital asset market in a positive way.
According to the theory of reflexivity proposed by George Soros, Bitcoin could be categorized as a reflexive asset. A positive sentiment exists between expectations and economic fundamentals as a consequence of Bitcoin’s impending halving. This may result in substantial deviations in price trends from the market prices of the most prominent cryptocurrencies.
A multitude of novel spot ETFs are propelling the modern era forward, thereby establishing a self-reinforcing cycle that elevates the spot to unfathomable heights. It is anticipated that the occurrence of the FOMO phenomenon will ensue once the psychological threshold of Bitcoin reaches $100,000. By the end of 2024, a crypto tempest could be imminent, following the forthcoming halving and other favorable developments.
Preventive measures can now be implemented to avert phishing attacks that previously utilized wallet-draining techniques to target prominent networks, including Ethereum, Binance Smart Chain, and others. In addition, an increase in tax-based regulations implemented by governments around the world should ensure a smoother ride through the crypto storm.