The price of Bitcoin has increased by more than 60% since the beginning of the year. However, it has fallen nearly 30% since the peak of April. With only a few months left until the end of the year, expectations are flying left and right around the asset’s price at that point.
One of the most popular patterns – Stock-to-Flow – sees BTC exploit a six-figure area by the end of December. If bitcoin is to reach such unseen and unimaginable heights (until recently, at least), it will have to double in value within a few months.
As such, the form builder recently the summary Some of the possible reasons that could drive such an impressive boom.
Bitcoin ETF Approval in the US
Perhaps one of the most discussed topics in the crypto space in the past year or so is whether the US Securities and Exchange Commission will (soon) approve an exchange-traded fund that tracks Bitcoin’s performance. It became more popular after Canada and Brazil gave the go-ahead for such products earlier in 2021.
The SEC has received countless applications since 2016. Almost all of them were rejected until last year, but in 2021 it has a new approach – delaying decisions. This, hints by Gary Gensler, and the fact that several analysts claim that the BTC Futures ETF may be around the corner, has led to speculation that such a product could actually be approved by the end of this year.
If it does happen, it will legitimize the underlying cryptocurrency among many investors and traditional financial institutions as they will be exposed to the asset through a well-regulated Bitcoin ETF. As such, the implications of such a move could actually lead to a significant rise in the price of the underlying asset.
Adoption is another big word this year (and last). PlanB touched on the legalization of bitcoin in El Salvador, with the country making history in September when it became the first country to ever do so.
So far, BTC usage is growing rapidly, at least according to El Salvador’s president, Neb Bokel. As such, the creator of S2F explained that if another country were to follow this example, it could increase the price of the cryptocurrency.
Even if it’s not a country, a prominent name can do the same. We’ve seen in the past how the price of BTC can fluctuate when names like Elon Musk talk about it. So, in the event that the crypto community gets a new Michael Saylor, bitcoin could go higher quickly.
Adoption can also come from the likes of a giant company like Apple, Amazon, Google or Microsoft. A recent fake report claims that Walmart will enable Litecoin payments that sent BTC in a few thousand dollars in minutes.
Although it turned out to be fake (which caused the price of Bitcoin to drop at the same speed), one can only imagine what would happen if one of the world’s largest institutions joined the crypto bandwagon.
U-Turn from China
This seems like the most unimaginable scenario at the moment. China has been against the crypto space for almost its entire existence. This year, though, the country has taken it to a whole other level by going after digital asset miners, trading, and everything in between.
The miners had to look for other homes, which had temporary negative effects on the BTC network. Several centralized cryptocurrency exchanges have had to stop serving Chinese users.
The world’s most populous country, known for its aversion to decentralized products or widely accepted internet entities, is developing its own central bank digital currency. It will work quite differently than Bitcoin, which means that it will allow the government to maintain control over all transactions.
Thus, the chances of a transformation in China appear to be minimal or non-existent. However, it may not be needed. The United States – the largest country in the world by nominal GDP – has already said that it will not go down the same path, which has had a positive effect on the markets.
What does history say?
Bitcoin stands below $50,000 so far. If it reaches $100,000 by the end of December, that means it should increase in value by more than 100%. It appears to be a difficult task, given the fact that he has less than three months left.
However, history has shown that the underlying cryptocurrency is capable of achieving such impressive increases. Exactly a year ago, it was trading at $10,500. However, it was a huge success by the end of 2020 and finished the year at $29,000. From a percentage point of view, this is a 175% increase in the same time frame.
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