Over the past week, Bitcoin has attracted a lot of attention, gaining 2.58% in seven days, according to data from CoinMarketCap. During this time, the leading cryptocurrency fell from a price of around $37,800 to almost a price of $39,000.
Following this positive price development, Bitcoin recorded impressive statistics, which could increase investor interest in the coming weeks.
Bitcoin sees highest level of profitability in two years
Through a Friday post on X, Blockchain analytics firm IntoTheBlock reported that 81.35% of all Bitcoin holders are currently making profits. This is the highest level of profitability experienced by BTC investors since December 2021, when the token was valued at over $50,000.
BTC profitability reaches its highest level since December 2021!
Over 80% of Bitcoin addresses are currently generating profits. This is the highest value since December 2021, when prices were above $50,000 per Bitcoin.
– Intotheblock (@intotheblock) December 1, 2023
Interestingly, Bitcoin’s profitability is likely to increase, with several factors indicating that the market leader could soon breach the $40,000 price zone.
First, there is currently a high level of optimism regarding the approval of a Bitcoin Spot exchange-traded fund (ETF) by the United States Securities and Exchange Commission (SEC). Bloomberg analyst James Seyffart injected a lot of hype into the crypto community on Friday by predicting that this possible order of approval would come between January 8 and 10, 2024.
Therefore, in anticipation of the massive institutional demand that a spot ETF could introduce to the BTC market, investors will likely begin to increase their Bitcoin holdings, which could lead to higher prices in the coming weeks.
In addition, the Chairman of the American Federal Reserve, Jerome Powell made statements suggesting that there would likely be no further rate hikes in the coming months. This development, if true, paves the way for Bitcoin, as well as other digital assets, to experience more price gains, as increasing Fed rates are known to discourage investment in assets high risk such as cryptocurrencies.
However, despite these favorable indicators, it is worth emphasizing that the crypto market remains subject to multiple forces and all investors are advised to conduct proper research before committing to the market.
Bitcoin network fees reduced by 50%
Another positive for the BTC community is that the Bitcoin network saw a 50% drop in total fees over the past week. In the block reports that this development was due to a drastic drop in transactions linked to ordinals.
The Ordinals protocol, launched in January 2023, allows the creation of non-fungible tokens (NFTs) called BRC-20 tokens on the Bitcoin network. Similar to the Ethereum network with its native NFTs, a high level of interest in Ordinals results in high network fees and vice versa.
At the time of writing, Bitcoin is trading at $38,758, down 0.17% over the past hour. At the same time, the daily trading volume of the asset increased by 4.97% and is valued at $20.37 billion.
BTC trading at $38,810 on the daily chart | Source: BTCUSD chart on Tradingview.com
Featured image from iStock, chart from Tradingview