The price of bitcoin has been having a great couple of weeks, with some of the most intense constant gains in value since spring of this year. That period has been preceded by the strongest growth in market cap and price value since the bitcoin network went live more than a decade ago. Numerous digital and offline developments spurred on the current price rise and many now believe that the BTC token has new record values in its crosshair. In the last leg of the price rise, it reached 57,600 USD levels before receding to the mid-50,000 zone. What is also important to note is that the trading reached a very elevated state that has not been seen since the middle of May.
That also points towards a steadily growing interest from both veteran traders and those who are only now entering the market on the wave of increased media attention about this price rise. That attention came from traditional news media, but also from many online quarters like social media, esports forums, and many similar places. Now, with an ever-clearer picture that the future movement of the BTC price is more likely to go up than down, here is an overview of the elements that fueled that growth so far and how they might play out in the coming weeks for any future gains (or losses).
Change in Investor Sentiment
Most experts usually cannot completely agree on the key factors that are propelling – or subduing – the crypto markets. They can, however, broadly agree if there is a perceivable change in the overall sentiment regarding these cryptocurrency markets. Right now, that change is definitely in the air. That is a scent in the air that is very familiar to seasoned traders and investors who have been active in the same financial realm for a prolonged period. Presently, most analysts believe that there is a possibility that exchange-traded funds or ETFs connected to the bitcoin futures are on the way in some shape and form.
There is also a strong accumulation of retail-level tokens that is present on all major digital currency exchanges. In this regard, October is important because the US SEC will either have to delay, approve or reject these ETFs. That deadline alone is pushing a lot of interest and there is a level of market participants that is drastically higher because of it. Even those who are looking for possible negative news on those ETFs are hopeful that they can utilize the moment to make a profit. However, as things presently stand, it seems that the SEC is not going to cause any kind of an issue and will instead allow the ETFs to come through as a financial product anyone can access.
Tempering of Expectation
There is clearly a lot of hope and hesitancy riding on the ETFs and their possible regulatory fate with the SEC. However, as many analysts noted, there is a constant need to temper any expectation when it comes to big changes in the crypto markets based on singular events, whatever they might be. In this case, the development around these bitcoin futures ETFs is a big one, but crypto markets showed time and time again that stand-alone changes rarely significantly impact the price and market cap trajectory all on their own.
This is especially true when they are positive news, which tends to be cumulative in their impulse. On the other hand, as the China FUD provided many times over, negative news can be sudden and individual in nature, when they kick start a spread of rumors and hypothetical scenarios. At the moment when the markets begin to climb, such sudden jumps are rarely spurred on by any entity, even the mighty US SEC that could very much influence the future long-term movement of the markets with their decisions.
The almost done deal with the SEC approval of these EFTs means that there will be a new way in the US to invest in crypto without actually having to hold these digital tokens in any way. Instead, they will be linked to the BTC futures already on the market, which are themselves linked to the price of the bitcoin token on the actual crypto markets.
While it all sounds like a copy of a copy of a copy, it is in fact a perfect alternative for institutional investors to put their funds into the overall crypto market but avoid any kind of regulatory or operational hurdle. The same thing happened with the entrance of Coinbase on the US stock market with its initial public offering. By buying a part of this company, investors and especially institutions have access to the ebb and flow of the crypto space, but no downsides of having to deal with underregulated technology directly.
The entire EFTs narrative is of course taking place in a wider environment that is very crypto-positive. Most importantly, there is an absence of regulatory fears for the same industry. That could be the biggest element in the entire story as it unfolds. The fact that some transitory elements point towards the possibility of an upswing in the markets is a positive one, but not relevant in the long-term as the price will swing up and down in its regular broader cycles.
However, a clear signal from the regulators, especially those that are in the US, showing they are not preparing some nasty sudden surprise is what is actually steering companies into crypto. For now, it seems that the accumulation of crypto in the digital exchanges but also in the private wallets and corporate coffers will go on. From it, companies can reap huge benefits and attain profits that dwarf anything that the traditional financial sector could offer. That, coupled with things like the adoption of bitcoin in El Salvador’s financial system shows a steadily improving picture for the crypto tokens across the board. That will spell profits for the traders and investors sooner or later.