After bitcoin temporarily surpassed $70,000 for the first time in its history on Friday, some bulls in the cryptocurrency space are now focusing on $100,000 as the next goal.
When exchange-traded funds that invest in token gain institutional inflows, Mark Connors, director of research at digital asset manager 3iQ Corp, predicted that the cryptocurrency will likely hit $100,000 before its next halving event, which is scheduled for April 20 or thereabouts.
According to Connors, this is the first time in the history of bitcoin that the cryptocurrency has achieved an all-time high within a year before halving. That doesn’t include the initial bitcoin halving in 2012, he pointed out, when cryptocurrency trading was still in its infancy. There have been three bitcoin halvings to date.
The Bitcoin blockchain system includes a halving mechanism to regulate the coin’s supply, with a 21 million coin maximum. The incentive for mining bitcoin is halved at halvings, which means miners will get 50% fewer tokens for validating transactions. After every 210,000 blocks that are mined, or roughly every four years, halvings are set to occur until the maximum amount of bitcoin is distributed.
According to Connors, the reason why Bitcoin surged this year before its halving is that we’re currently seeing a demand shock, whereas the previous focus was on a supply shock.
Since bitcoin ETFs began trading on January 11, the pool of potential investors has grown, according to a call by Greg Magadini, director of derivatives at Amberdata.
In the meantime, BlackRock last week submitted revisions to the Securities and Exchange Commission in order to include bitcoin in its Global Allocation Fund (MALOX) and its Strategic Income Opportunities Fund (BSIIX).
According to Charles Yu, vice president of research at Galaxy Digital, these BlackRock filings support the idea that bitcoin can provide portfolio diversity and higher returns.
Since a variety of other investment vehicles (such as mutual funds, closed-end and private funds, etc.) are likely to add bitcoin to their portfolios across a range of investment objectives and strategies, there will likely be a much larger impact on BTC demand from second-order effects of bitcoin ETF approval, Yu wrote in a note on Friday.
According to data, ether has increased along with bitcoin’s surge, closing Friday at almost $4,000. The cryptocurrency with the second-largest market capitalization is still over 17% below its all-time high of $4,865.57, which it attained in November of 2021.
The SEC must determine whether to authorize spot ether ETFs by May 23, which is a crucial deadline that investors are anticipating.
However, Thomas Tang, vice president of investments at cryptocurrency venture firm Ryze Labs, pointed out that even if an ether ETF were approved, the effect on the market might be negligible in comparison to bitcoin.
On the first day of trading, six ether-futures exchange-traded funds (ETFs) saw a combined trading volume of $2 million, but the ProShares Bitcoin Strategy ETF—the first ETF investing in bitcoin futures—experienced a trading volume of almost $1 billion on its launch, according to Tang.
