Bitcoin has reached record highs this year thanks to two catalysts: the ETF’s spot approval in January and the recent halving event. The trendy cryptocurrency is up more than 60% year-to-date on Friday, trading at around 6% of all-time highs reached in March.
While both points are expected to continue to drive Bitcoin’s value, they are now on the back burner and investors are wondering where to look for other benefits. According to analysts, there are many tactics to keep Bitcoin’s value rising.
Below are 4 upcoming catalysts:
Investors are focused on the prospects of a Federal Reserve rate cut, expecting a rebound in stocks as a result. The same dynamic applies to Bitcoin, which trades as a speculative asset that appreciates when loan prices are lower.
In fact, it was largely the ultra-low interest rates of 2021 that led Bitcoin to hit a record high that year. The recovery was then reversed when the Federal Reserve introduced its financial tightening campaign.
“In the first quarter, we saw a halving, but mostly this huge adoption of ETFs. So if you take that into account, we’re now on what the Fed can do,” Mike Novogratz, chief executive of Galaxy, told Bloomberg. month.
Until short-term interest rates fall, Bitcoin will most likely remain in a range between $55,000 and $73,000, he said.
At this point, the crypto network is also looking for regulatory consistency, which has proven to be a common hurdle for Bitcoin. For example, the final approval of spot ETFs through the Securities and Exchange Commission was preceded by a loss in court.
But it turns out that the legal sentiment around cryptocurrencies is tightening. A long-term catalyst for Bitcoin may simply be the impending stablecoin bill, Oppenheimer CEO Owen Lau told CNBC in early May. This could happen as soon as this year.
Meanwhile, the U. S. House of Representatives has just passed a far-reaching regulatory framework for the crypto industry, which is being hailed as a victory for the sector. While its fate is unclear in the Senate, it would provide the cryptosphere with clearer rules.
But true regulatory clarity will come after the presidential election, Novogratz said. He noted that Republican candidate Donald Trump is a developing voice for the industry, contrary to President Biden’s policies.
In a May note, Standard Chartered’s Geoff Kendrick also said that a Trump victory would be largely positive for Bitcoin.
He added that developing considerations on the evolution of the U. S. deficit and debt will be a major factor in the development of the U. S. deficit and debt. The U. S. market would likely also cheer for Bitcoin as investors began to make select investments. That could happen with either candidate, since none has come up with a plan for how to manage public spending, Kendrick said.
As the outlook on Bitcoin evolves, the cryptocurrency itself is undergoing a redesign.
According to Bloomberg, developers have been striving to upload features to the Bitcoin network. These efforts aim to make cryptocurrencies more than just a speculative asset to hold and, with projects coming online quickly, they may simply be offering a catalyst.
For example, the recently launched Ordinals protocol allows users to buy more than just Bitcoin on the BTC blockchain while also starting to trade assets such as nonfungible tokens. Already, the ordinal market has noticed that the trading volume reached $3. 42 million in mid-May. Bitget CEO Gracy Chen wrote in X.
“The advent of Bitcoin ordinals in 2023, the popular BRC-20 token created thereafter, and now the popular Runes token, have helped spark interest in viewing Bitcoin as a network of platforms, not just a financial network,” Galaxy wrote in a matrix note. And today these projects attract a lot of attention from venture capitalists, he added.
Jump To