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Despite some apparent setbacks, such as the change in leadership at Binance, Bitcoin’s continued bullish trend is turning into a runaway success as the price has crossed the $40,000 mark.
Things are going well for Bitcoin lately. Not only has the general trend in its valuation been a steady increase throughout 2023, but September also saw that steady growth move up a notch. Although some claim that this growth will run out of steam or reverse, the beginning of December showed that opposite is true: this looks like a real bull market. At the beginning of September, it was valued at $25,000 and crossed the $40,000 mark shortly before December.
One of the clearest signals that the hype train was going to slow down was the events at Binance. Despite being the world’s largest digital asset exchange in November, the company pleaded guilty to financial crimes in the United States, leading to the departure of the CEO and a billion-dollar fee. dollars in addition to the loss of the crown of this stock exchange. As competitors decided to reduce Coinbase’s market share, a question arose for skeptics: why isn’t Bitcoin suffering more? When the world’s first stock market failed in the industry, such as with Mt. Gox or FTX, it has often taken a significant share in Bitcoin. “Crypto” seems to be suffering badly right now, but Bitcoin looks brighter than it has in a year and a half. Where does this robustness come from, in such a volatile asset?
Most cited reason because all this success has been the continued feeling of imminent victory on a Bitcoin spot ETF. The ETF, or Exchange-Traded Fund, is a new financial instrument whose valuation is directly linked to bitcoin, and would have a very broad reach on the American markets. Although anyone could buy bitcoins, the ETF would mark a whole new level of prestige and acceptance: anyone could buy them without understanding or even being fully aware of the concept of self-custody, as if a pension or mutual fund was redeeming. the SEC has continued to drag its feet on firm acceptance, it is generally believed that the fight is coming to an end. Bloombergfor example, openly cites the ETF as a reason for predicting a bitcoin price of $500,000 by the end of the upcoming cycle.
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There is, however, more to this belief than just a collective fantasy. Although it is difficult for an unelected board like the SEC to be directly influenced by popular opinion, there is real power exerted on the Bitcoin ETF side. For example, BlackRock, the world’s largest asset manager, has seen sustained growth prominent role in the fight against the ETF, filing one of the first petitions with the SEC and throwing its weight behind the legal battle. On December 5, it was made public that it had received a boost: on October 27, a single unknown investor gave the company $100,000 to add to its war chest.
Cases like this have shown the true resilience of Bitcoin, as these large institutions have contributed to a general sense of optimism that can be measured in many distinct ways. For example, the desire to “hold” bitcoins and refuse to sell them for years has been treated as gospel by many Bitcoiners. This figure has clearly gradually increased over the last few months: August, when the rally had not even started, it was revealed that bitcoin holdings on major exchanges had fallen to the lowest level in five years. However, in the months of success that followed, the trend grew stronger. exploded.
An increase in self-guarding like this could indicate several different trends. First of all, especially in light of the events at Binance, this could simply mean that a growing number of Bitcoiners want to take advantage of the blockchain’s radical self-custody options. Why keep your money on an exchange if you don’t need it? The important thing to note is that the trend is to remove bitcoin from exchanges for self-custody, not simply sell it for fiat. In other words, people expect its value to continue to rise, and they expect it so deeply that it becomes increasingly difficult to find someone who will sell. And as evident from these price movements, it’s a smart decision to make.
In this space, certain positive movements tend to feed off each other. While Bitcoin technology obviously has revolutionary implications for the global monetary system, it also doesn’t hurt when speculative value is doing well. Take, for example, the case of El Salvador, a Central American country that shocked the world by making bitcoin legal tender. There have been many benefits, such as the arrival of tourism money and the creation of new jobs with a burgeoning digital asset industry. However, the country has also invested directly in bitcoin, and this is the subject of much discussion. mockery for much of the established press. With the “failures” and “bombings” of Bitcoin, there were “little to show” of the nation’s investment in terms of dollars and cents.
But today, Salvadoran President Bukele is proud to claim that “El Salvador’s Bitcoin investments are in the dark!” Despite “literally thousands of hit articles and pieces ridiculing our alleged losses,” he said, “if we were to sell our bitcoin, we would not only recoup 100% of our investment, but also make a profit of US$3,620,277.13 (as of December 31, 2019). He added, of course, that the government has no plans to sell anything. El Salvador has been buying bitcoin at a steady rate, and it’s a true mark of success that the country can even call this decision justified. The new jobs and tourists will come one way or another, but after all, surely it is better to prove the haters wrong.
In short, this is an extremely positive sign that Bitcoin is doing well in this environment, enjoying some of the best news it has had in years. Some of the biggest rallies, like those in 2017 and 2021, happened quickly, with few signs of this success. We currently have undeniable signs. Bitcoin has had a few months where the “crypto industry” has experienced real shake-ups, and the world’s leading digital asset has barely noticed. It’s important to remember that some of the biggest collapses also happened without warning, and many were directly caused by exactly the same type of problems that Bitcoin may be currently overcoming. Who knows where we will be when the ETF is approved? Who knows what kinds of benefits will accrue to the whole world? Either way, a more resilient Bitcoin is poised to move into the future, and it really looks very promising.