Is Bitcoin Growing – Is It Only Here?

Bitcoin It continued its rise this week and is now trading below $44,000, up nearly 16 percent on the week. It's up 25% in the past month—enough of the jump that “digital gold” now has. It is upside down Meta will be the world's ninth most valuable asset by market capitalization.

But this is just the beginning, according to analysts who spoke to Decrypt.

The asset's current moves are “typical of bull markets” — as in 2020, according to Greg Magadini, director of derivatives at Amberdata. Decrypt.

The reason for the rapid price action is mainly due to the excitement over the space launch. Bitcoin Exchange Traded Fund (ETF)News of the long awaited investment car process is pouring in every day.

Bloomberg Intelligence and Grayscale analysts say it's only a matter of time before Bitcoin ETFs finally hit the US market. If it happens, a Bitcoin ETF It finally provides an easy way for traditional investors to gain exposure to BTC without having to buy and hold digital coins directly – promising to bring fresh capital into Bitcoin.

But it's not just the ETF boost that's driving the rally. There are other factors at play. The prospect of lower interest rates, which were at historic highs last year and are expected to come down soon, is also helping.

“Fundamentally speaking, lower interest rates help Bitcoin According to Magadini, bitcoins (a non-interest-bearing asset) get value as the probability of holding them decreases.

The US central bank began raising interest rates last year to curb high inflation. The actions have had a negative impact on riskier assets such as stocks and crypto, which typically see large price movements. Because when interest rates rise and funds become more expensive to borrow, investors are more likely to hold their dollars rather than park them in stocks or other similar assets.

But the beast can be tamed: Last week, federal governor Christopher J. Waller he said. He was “increasingly confident” that things were on the right track, saying the central bank could start cutting rates soon.

And that's probably working in Bitcoin's favor, says ONDA Senior Market Analyst Craig Erlam. Decrypt.

And more money from institutional investors is helping to push the price higher, said Mesari research analyst Tho Bautista. DecryptNoting that Bitcoin open interest, totaling nearly $20 billion, is closing at November 2021 highs.

“The Chicago Mercantile Exchange (CME) led this trend with $5.1 billion in open interest, indicating strong institutional participation, indicating an increase in open interest in options and reaching annual highs in traditional financial crypto instruments,” he said.

So where does it go from here? as a Decrypt As previously reported, analysts say that next year's recession or the decline of the Bitcoin ETF could slow things down and reverse the gains.

But experts are optimistic. “As we've seen in the past, once Bitcoin moves, it can be hard to stop,” Oenda Erlam said.