Bitcoin is up by more than 110% in 2023 from $16,677 on January 1 2023 and has since surged to ~$35,000 in just a span of 10 months as of this writing.
On October 23 2023, the cryptocurrency came close to reaching $35,000, marking its highest price point since May 2022 when the Terra/LUNA crisis caused a significant drop in the value of many digital tokens.
#Bitcoin price at the time of writing pic.twitter.com/sYlsIxEu0W
— BitKE (@BitcoinKE) October 26, 2023
Several major asset management firms, including Fidelity, VanEck, and WisdomTree, have submitted applications with the aim of becoming the first entities in the United States to obtain approval for a traditional Bitcoin exchange-traded fund (ETF).
One specific name that has garnered more attention than the others is the world’s largest asset manager, BlackRock, overseeing approximately $10 trillion in assets. According to BlackRock’s CEO, Larry Fink, their clients worldwide have expressed interest in gaining exposure to Bitcoin. He described the recent surge in Bitcoin’s price as a ‘flight to quality.’
BlackRock, the largest asset manager globally, hit the headlines in April 2023 after it submitted an application to the United States Securities and Exchange Commission (SEC) to register a Bitcoin exchange-traded fund (ETF). BlackRock, which managed $9.5 trillion in assets during the first quarter of 2023, is collaborating with Coinbase, the largest cryptocurrency exchange in the United States.
Further to that, Bitcoin is expected to undergo a halving in approximately 180 days, around late April 2024. During this event, the Bitcoin block reward will be reduced from 6.25 BTC per block to only 3.125 BTC. This will mark the fourth halving event in Bitcoin’s history. The previous halvings took place in:
- November 2012
- July 2016
- May 2020
- April 2024 (upcoming)
Historically, in the year preceding and following a halving event, the price of BTC has shown a tendency to increase significantly.
Coupled with the increasing likelihood of ETFs approval, the demand for BTC is expected to rise over the coming months. More demand could lead to rising prices since the supply of bitcoin is limited, and issuance becomes ever more constricted.
The cryptocurrency’s rapid ascent in value, hitting an 18-month high as well, has allowed Bitcoin to recover from all the losses it incurred following the collapse of the Terra stablecoin in May 2022.
The unexpected decline of Terra had a domino effect and led to the downfall of several prominent companies, including lending platform Celsius and Sam Bankman-Fried’s FTX exchange.
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