Bitcoin remains seated at $30,000, but the upside pressure is palpable. Top 5 (crescendo) bullish factors.
The exchanges empty
More than 97,000 bitcoins have left exchanges in the last thirty days.
A good part of these BTCs come, it is true, from Binance and Coinbase with which the SEC has been crossing swords for some time.
However, this trend is older. It has even been uninterrupted since February 2020. More than a million BTC have left the exchanges since then.
The percentage of existing BTC on major exchanges is at a five-year low. There would be only 1.88 million BTC left on the twenty largest exchanges.
This is excellent news since once in your wallet, the temptation to trade (sell) disappears. As Michael Saylor said at the BTCPrague conference:
“Over a year, 85% of the performance of the S&P500 index occurs during a single day. And 100% in just 36 hours. […] Trading is the sign of intellectual inferiority. »
Trying to beat the market is a monumental waste of time which, in the end, periodically adds selling pressure. Just Hodl!
Dominance of Bitcoin
Bitcoin’s 50% dominance has been in the news recently. However, this figure is misleading since it takes into account derivatives of national currencies that are stablecoins.
Take them out and Bitcoin dominance increases to 70%. Remove the Proof of Stake (Ethereum) again and we are at 95%.
Monetary hegemony is a fight to the death. No shitcoin has ever stood a chance against bitcoin.
As expected, the SEC finally signaled the end of the game and these mountains of “scams”to use the words of Gary Gensler, will disappear from the exchanges one after the other.
In other words, the few tens of billions of dollars remaining in shitcoins will flow more and more quickly into Bitcoin.
It would seem that Bitcoin Cash is the new prey of the pump & dump, but be patient, this money will end up in Bitcoin’s purse.
AND F
The fact that BlackRock dubbed Bitcoin via its ETF application is a strong signal. A dozen giant funds are jostling at the gate of the SEC. And not least since Fidelity is also in the running.
It would be enough for American investment funds to allocate 1% of their capital for bitcoin to absorb $1.3 trillion. This would be equivalent to tripling the capitalization of BTC.
Distrust, however. The best thing would be for many ETFs to emerge. Indeed, BlackRock warns in its ETF request that in the event of a fork, it is up to it to decide which one is legitimate…
A decentralization of funds among many ETFs is much more desirable. This would protect us against the dark scenario where the hundreds of billions of institutional investors end up in a fork controlled secretly by them.
Healthy paranoia aside, many individual investors are still afraid to invest in Bitcoin. They are waiting for such funds to launch to take the plunge.
An ETF would therefore see an influx of institutional investments, but also of individuals.
bitcoin halving
The “halving” means the halving of the rate of issuance of BTC. Since 2023, 6.25 bitcoins have been issued approximately every ten minutes. It will be 3,125 BTC from next April.
If history repeats itself, we are set for a new record above $100,000. Hence the interest of placing yourself in advance…
Remember, however, that the impact of the halving drops by half each time. Decreasing the reward from 50 BTC to 25 BTC impacts the supply more than a decrease from 6.25 BTC to 3.125 BTC. Ambient demand must have doubled since the previous halving for the impact to remain the same.
In addition, one should not forget to take into account the market capitalization of bitcoin. As we wrote in this article:
“If bitcoin’s market capitalization is a billion dollars, it only takes another billion to cause 100% appreciation. If bitcoin is worth 500 billion, it takes roughly another 500 billion to reap another 100% appreciation. »
In other words, we will probably never see four-digit annual appreciations again. However, the potential remains huge compared to any other asset class.
“Fair value”
Perhaps the biggest bullish factor in the short term is the reform coming from the US accounting system suggested by the Financial Accounting Standards Board himself.
It is rumored that the FASB will soon allow companies to account for Bitcoin at its fair value (“fair value accounting”).
Clearly, Bitcoin is not yet covered by current accounting rules. So that companies are required to record a loss in their accounts if the price of bitcoin falls, while the reverse is not possible.
Capital gains can only be recorded if bitcoins are sold. This results in corporate accounts that do not reflect reality and may deter potential investors.
However, not everyone is mistaken. The stock value of Microstrategy (which owns more than 150,000 BTC) is indeed up 160% since the start of the year.
Unfortunately, other lesser-known multinationals might not be so lucky. It is therefore a safe bet that many companies will take the plunge if the accounting rules change.
Let’s end by saying that the primary factor remains inflation, which no longer leaves anyone unmoved in Western countries. It is even rumored that central banks will soon adopt an inflation target of 3% rather than 2%…
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