of Bitcoin Its recent rise to over $44,000 has been a subject of intense discussion among investors and analysts. cryptocurrency Analysts affiliated with exchange Bitfinex have now shed light on the factors driving this rally.
According to analysts, the first important factor is the Bitcoin halving event, which is expected to occur in April 2024. Traditionally, this event has led to price increases due to a reduced supply of new coins. Analysts said the following regarding this incident:
“This event is associated with supply shortage and increases the price. Coupled with the fact that we currently have the highest inactive supply statistics, especially for long-term coin holders, this impact is already ongoing.”
The possible approval of spot bitcoin ETFs is another important factor and, if approved, could open the doors for a surge in institutional investment, according to analysts:
“The potential impact of institutional money on the BTC price could be significant. In addition, ETFs will go live several months after approval, which will mean an increase in the speculative window following such a bullish announcement.”
El Salvador’s adoption of Bitcoin and the potential for greater adoption by other nations or large corporations could also increase BTC’s value and credibility, according to Bitfinex analysts. “Argentina electing a pro-BTC president in an economy struggling with inflation is an important development,” analysts said.
Finally, analysts pointed out that if central banks globally begin to reduce interest rates, this could make riskier asset classes such as cryptocurrencies more attractive. “Monetary policy for 2022-23 has seen a very high correlation with crypto price trends and monetary policy,” Bitfinex analysts said.
*This is not investment advice.
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