While Bitcoin investors are happy that the main crypto asset of the market has again rushed above the $50,000 mark, we will try to understand the reasons for its growth, highlighting several main ones.
Since September 29, the cryptocurrency with the most massive market cap has surged more than 20%, in parallel with the fall in Wall Street stocks. The S&P 500 slipped 2.6% over the same period. Moreover, this is not the first time that the rise in Bitcoin quotes fell on the period when the S&P 500 fell by more than 2%.
Industry experts argue that Bitcoin's resilience as a store of value has attracted many institutions lately. In addition, speculation about the imminent adoption of the Bitcoin ETF in the US is only fueling interest.
Inflation is a phenomenon that does not disappear anywhere. The cost of goods and services across America continues to rise, sooner or later affecting every citizen. Hence, people are looking for alternative financial instruments to save their money. Suddenly they are reminded of Bitcoin, an asset that cannot be manipulated by the authorities or central banks.
Do not forget about one of the main features of Bitcoin a decrease in the remuneration for its miners by 50% every 4 years to reduce the rate of supply expansion. This is in stark contrast to the US Federal Reserve's “endless” dollar press. For example, MicroStrategy has recognized the victory of Bitcoin by adopting it as a currency capable of preserving the value of the company's securities.
The COO of hedge fund Panxora Group said the rising price pressures in the economic industry and the uncertainty about the US debt ceiling are negatively affecting stocks, but not hampering Bitcoin as people increasingly turn to them to hedge inflation.
Venture capital firms are increasingly investing their millions in the cryptocurrency industry without stopping even during a severe bearish trend. According to ByteTree Asset Management, over the past 4 weeks, European and Canadian ETFs, as well as Canadian and US funds, have accumulated more than 3,000 BTC.
The investment director of Arca Funds is convinced that the growth of the main cryptocurrency on the market in early October is primarily due to untraceable cash flows venture capital investments and direct purchases of digital currencies using the world's largest crypto exchanges.
Crypto companies managed to raise a record $7.5 billion from July to September 2021, according to PitchBook. This beats the previous record of $7 billion that was seen in the market in the first quarter of 2021.
The US SEC regularly defers consideration of Bitcoin ETFs, in contrast to Canada, where BTC and ETH ETFs are actively driving the growth of the local market. However, investors remain optimistic about this, awaiting the early approval of the first Bitcoin ETFs in the US.
The SEC chairman also demonstrates support for Bitcoin futures ETFs and his sentiment is perceived by the crypto community as an obvious bullish sign. Today, the SEC has more than 20 ETF applications on the table, as well as Bitcoin and Ethereum ETF futures.
An important factor that definitely should not be discounted. Some crypto investors may invest in Bitcoin in the hope that the last three months of the year will bring them significantly more profits than all other seasons. In principle, such a solution is not new, both for the traditional market and for the digital currency market.
The seasonality graph shows that September is often the worst month of the year. But October and the entire fourth quarter on the contrary are the strongest.
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