Nikolas Sargeant
The reason for the now stable price hovering above $40,000 isn’t down to one particular thing. There have been a variety of different factors that have affected the price. While nothing is concrete, we’ve compiled a brief list of the five main contributors to the recent rise in the price of BTC.
Eagerly Awaiting Approval of a Spot Bitcoin ETF: Speculation is rife regarding the potential green light for a spot Bitcoin ETF. While there's no concrete update, the mere anticipation has triggered a Fear of Missing Out (FOMO) phenomenon among investors. Comparisons are being made to the debut of the SPDR Gold Trust, the inaugural gold ETF, which sparked a notable surge in gold prices.
Gold Price Surges and Its Link to Bitcoin: The unforeseen and swift ascent in gold prices also appears to exert a positive influence on Bitcoin. This uptick in gold's value reflects more profound economic shifts, subsequently impacting Bitcoin, often hailed as 'digital gold.'
Bitcoin Experiences a Short Squeeze: A significant unwinding of Bitcoin short positions has contributed to the price surge. The short squeeze and robust demand in the spot market have played a pivotal role.
Whales and Institutional Buyers Drive Market Activity: The participation of substantial investors, colloquially termed 'whales,' and institutional buyers stands out as a key catalyst for the recent price spike. Their market maneuvers indicate a pronounced bullish sentiment towards Bitcoin.
Influence of Global Liquidity Conditions: Global liquidity conditions have shadowed financial markets, including cryptocurrencies. Central banks worldwide injecting considerable liquidity have emerged as a critical factor in influencing asset prices, including those of Bitcoin.
Whether the price of BTC remains is anyone’s guess. However, with some of the positive changes due to effect in 2024, specifically the introduction of ETFs, many are speculating on a further price hike throughout the year.
