The bitcoin price smashed through $60,000 per bitcoin, hitting highs of almost $63,000 yesterday before falling back slightly and pushing the combined cryptocurrency market to over $2.5 trillion—returning to its May peak.
As bitcoin, ethereum and other major cryptocurrencies rocket higher, bullish crypto investors are predicting a “ludicrously strong” rally through the rest of 2021.
“Bitcoin, ethereum and the broader crypto market are likely to have a ludicrously strong Q4, and I predict we will see new all-time highs across the board by 2022,” Nick Spanos, the creator of the Bitcoin Center NYC and co-founder of decentralized network Zap.org, said in emailed comments. Spanos predicts bitcoin will hit $100,000 before the end of the year and expects the ethereum price to more than double to between $10,000 and $12,000.
The ethereum price, now nudging $4,000 per ether, has outperformed bitcoin’s rally over the last year, adding almost 1,000% compared to bitcoin’s 500% increase.
The bitcoin and cryptocurrency market has been set alight by news this week the U.S. Securities and Exchange Commission (SEC) is finally gearing up to approve a long-awaited bitcoin futures ETF. The first U.S. bitcoin futures ETF is set to begin trading next week, according to reports. It’s thought the introduction of bitcoin ETFs, making it easier for investors to speculate on the bitcoin price, will result in more money flowing into the crypto market.
“After a week of building expectations and momentum, bitcoin has hit $60,000 again for the first time in almost six months,” Simon Peters, crypto-asset analyst at investment platform eToro, said in emailed comments.
“[Yesterday’s] spike appears to have been triggered by investors’ growing confidence that U.S. regulators will approve the launch of an ETF based on bitcoin futures contracts—but a rise past $60,000 has been looking likely for a while now after weeks of positive net inflows into bitcoin from institutional investors, a growing migration of bitcoin from short-term holders to long-term holders, and the attendant squeeze on bitcoin supply.”
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Other market watchers have pointed to large investors, known as whales, holding more bitcoin, resulting in a supply squeeze.
“There has been a steady increase in investors entering the marketplace, with the number of Kraken account sign-ups increasing consistently month-on-month since the summer,” Curtis Ting, Europe, Middle East and Africa managing director at crypto exchange Kraken, said in a statement.
“This has coincided with the sustained evaporation in bitcoin’s at-the-market supply. As Kraken Intelligence highlighted in last month’s report, the amount of bitcoin held by whales reached a record total of 11.88 million—more than half bitcoin’s total supply—in mid-September. With the possibility of a bitcoin ETF galvanizing the investor community, pushing more and more funds into the digital asset class, the surge above $60,000 could be the result of ever-shrinking supply struggling to match soaring demand.”
Bitcoin, ethereum and cryptocurrency bulls have cheered the broad price rally even after a heavy-handed crackdown on bitcoin and crypto in China and Tesla billionaire Elon Musk appearing to somewhat sour on bitcoin.
“The cryptocurrency market has already demonstrated itself to be increasingly resilient to adverse market developments, such as China clamping down on crypto or Elon Musk backtracking on his pro-crypto stance,” said Spanos.
“This is crucial to crypto’s long-term success, and I believe the market will become even more resilient as crypto investors get used to seeing crypto always bounce back better and stronger. This will result in less panic-selling, and therefore dips and market crashes will become a much rarer occurrence.”