CryptoNews of the Week

Publish date: Wed, 17 Jan 2024, 06:57 AM
CryptoNews of the Week

– The long-standing regulatory saga surrounding the launch of spot bitcoin ETFs finally concluded last week, with the U.S. Securities and Exchange Commission (SEC) issuing the corresponding approval. Against this backdrop, the quotations momentarily surged to $49,000. However, the cryptocurrency subsequently depreciated by nearly 15%. Experts attribute this to an overbought condition or what is known as "market overheating," as reported by Cointelegraph. The SEC's positive decision had already been factored into the market price, and many investors now decided to realize profits rather than purchasing the more expensive asset.

Cointelegraph experts also noted that bitcoin ETFs have already attracted over $1.25 billion. On just the first day, the trading volume of these new financial market instruments reached $4.6 billion. However, the Bitcoin Dominance Index has been steadily declining. Over the past week, the index fell from 54.56% to 51.14%. Concurrently, many altcoins are exhibiting growth, indicating that investors are reallocating capital in favor of alternative coins.

– On the eve of the SEC's decision, some analysts had predicted a decline in bitcoin's price. For instance, analysts at CryptoQuant talked about a possible drop in quotations to $32,000. Other forecasts mentioned support levels at $42,000 and $40,000. "Bitcoin failed to overcome the $50,000 mark," Swissblock analysts write, raising the question of whether the leading cryptocurrency can regain the momentum it has lost.

Moreover, there is growing concern in the market due to the steady increase in the hash rate on the BTC network. This could lead to a scenario where miners start selling coins more actively. Recently, they have transferred bitcoins worth over $1 billion to centralized platforms, creating additional selling pressure and negatively impacting price dynamics.

– The international environmental organization Greenpeace criticized the SEC's decision regarding spot bitcoin ETFs. "Without significant changes in mining practices, this poses serious problems for our efforts to prevent the worst consequences of the climate crisis," the environmentalists stated. "As the price of bitcoin rises, so does its environmental impact. Miners consume more electricity […], which is predominantly generated from fossil fuels, leading to increased carbon dioxide emissions and water consumption," Greenpeace added.

– The entry of BlackRock, the world's largest asset management company in terms of managed assets, into the crypto market could bring significant changes. This financial giant has the potential to surpass MicroStrategy as the foremost holder of digital gold. BlackRock's bitcoin ETF remarkably attracted about $500 million, roughly equivalent to 12,000 BTC, in just two days. Continuing at this pace, BlackRock could become the largest holder of bitcoins by February 1.

For context, MicroStrategy is currently the top holder with 189,150 BTC, outpacing competitors like Marathon Digital and Tesla.

– Analysts at the investment bank Morgan Stanley have studied global market trends and concluded that the role of the US dollar as the cornerstone of the international financial system may be reevaluated. In their view, the growing interest in digital assets like bitcoin, the increasing circulation of stablecoins, and the real prospects of using Central Bank Digital Currencies (CBDCs) in cross-border transactions are changing the world.

"These innovations, though still in their infancy, open up possibilities for challenging the hegemony of the dollar. Macro-investors should consider how these digital assets, with their unique characteristics and increasing adoption, could alter the future dynamics of the dollar," Morgan Stanley strategists write.

Andrew Peel, Head of Digital Assets at Morgan Stanley, believes that the process of dedollarization in the global economy could significantly accelerate with the launch of spot bitcoin ETFs, as weekly inflows into these new products already exceed billions of dollars. The popularity of BTC has been consistently growing over the last 15 years, and currently, over 106 million people worldwide own the first cryptocurrency, Andrew Peel reminds us.

– Elizabeth Warren, a member of the U.S. Senate Banking Committee, criticized the SEC for approving bitcoin ETFs. She believes that this decision could harm the country's financial system and investors.

Conversely, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, took an opposing stance. In an interview with Yahoo Finance, she refuted concerns that bitcoin could potentially displace the US dollar. The IMF chief stated that cryptocurrencies are an asset class, not money, and it's essential to make this distinction.

Ms. Georgieva also disagrees with industry participants who think the recent approval of spot BTC-ETFs will lead to the mass adoption of the first cryptocurrency. In her view, that day is still far off, so such discussions are not very meaningful. "I'm not in a hurry to convert my dollars into another currency. It doesn't mean that one shouldn't diversify investments. But I wouldn't worry about bitcoin competing with the dollar," added the IMF director.

– Tom Lee, co-founder of the analytics firm Fundstrat, expressed his opinion in an interview with CNBC that the first cryptocurrency's quotations could reach $100,000 - $150,000 by the end of 2024 and $500,000 in the next five years. "In the next five years, we'll have a limited supply, but with the approval of spot bitcoin ETFs, we potentially have enormous demand, so I think something around $500,000 is quite achievable within five years," the expert stated. He also highlighted the upcoming halving in the spring of 2024 as an additional growth factor.

– Cathy Wood, CEO of ARK Invest, stated on CNBC that under a bullish scenario, the first cryptocurrency could reach a price of $1.5 million by 2030. Experts at her firm believe that even under a bearish scenario, the value of the digital gold will increase to $258,500.

– Anthony Scaramucci, founder of the hedge fund SkyBridge Capital and former White House Communications Director, provided another forecast. "If bitcoin is priced at $45,000 during the halving, then by mid-to-late 2025, it could be worth $170,000. Whatever the price [of bitcoin] is on the day of the halving in April, multiply it by four, and it will reach that figure in the next 18 months," said the SkyBridge founder in Davos, ahead of the World Economic Forum. Scaramucci also mentioned that it would likely take another eight to ten trading days to observe the impact of the new spot ETFs on the price of the first cryptocurrency.

– Prominent investor and founder of MN Trading Consultancy, Michael Van De Poppe, reported that his account on social network X (formerly Twitter) was hacked on January 16th. He addressed his 864,000 followers, emphasizing his hope that none of them followed the phishing links posted by the culprits. The investor is counting on the fact that trusting users have not lost their cryptocurrency funds.

Following this incident, Van De Poppe continued to publish market analysis as usual. He noted that "this will be the last 'easy' cycle for bitcoin and cryptocurrencies." According to him, the current phase will take a bit longer than before, but it will change the lives of many people on Earth. Regarding the current situation, the expert said that the price is stuck between several levels. Resistance is at $46,000, but the price is expected to test support in the range of $37,000 to $40,000.

– Economist David Rosenberg, founder of Rosenberg Research, views buying bitcoin more as gambling than investing. His distrust in BTC is partly due to its high volatility, as evidenced by its price movements following the SEC's decision to approve the first spot BTC-ETFs in the USA.

Rosenberg believes that traditional stocks, by contrast, represent future cash flows of any company; bonds and savings accounts yield interest, and commodities have industrial applications, and their demand can be modelled, unlike bitcoin.

"If you want to get rich believing in cryptocurrencies, then add lottery tickets to your assets," advises the economist. He adds, "This and other tokens are examples of the 'greater fool theory' in action – people buy them not because they are inherently valuable, but because they hope to sell them at a profit to someone even more foolish."

– Amid growing market speculation in anticipation of the imminent launch of a spot ETF for Ethereum, analysts at the investment bank TD Cowen have stated that, according to the information they have, it is unlikely that the SEC will begin to consider applications for approval of this investment instrument in the first half of 2024. "We believe that before approving an ETH-ETF, the SEC will want to gain practical experience with similar investment instruments in bitcoin," commented Jaret Seiberg, head of TD Cowen Washington Research Group. TD Cowen believes that the SEC will return to the discussion of ETFs on Ethereum only after the U.S. presidential elections, which are scheduled for November 2024.

Senior analyst at JP Morgan, Nikolaos Panagirtzoglou, also does not anticipate the swift approval of spot ETH-ETFs. According to Panagirtzoglou, for the SEC to make a decision, Ethereum needs to be classified as a commodity, not a security. However, in the near future, JP Morgan considers this event unlikely.

– Six AI-based chatbots have predicted the price of bitcoin at the end of 2024:

Claude Instant from Anthropic's Forecast: With increasing institutional adoption, regulatory clarity, and reduced supply post-halving, the price of bitcoin is expected to reach $85,000 by December 31, 2024.

Pi from Inflection's Forecast: The approval of 11 spot bitcoin exchange-traded funds (ETFs) in the USA certainly changes the game, and the upcoming halving adds more excitement. Considering the current price of bitcoin, it's predicted that the price could reach $75,000 by December 31, 2024.

Bard from Gemini's Forecast: The approval of 11 spot ETFs and the reduced supply due to the upcoming halving could trigger significant demand, potentially pushing the bitcoin price above $90,000 by December 31. However, unforeseen economic obstacles might restrain this growth, possibly capping the peak at around $70,000.

ChatGPT 3.5 from OpenAI's Forecast: Given the volatile nature of cryptocurrencies and the influence of various factors such as macroeconomic conditions, legislative changes, and market sentiment, making accurate predictions is challenging. Considering these factors, a bitcoin price within $75,000 to $85,000 by December 31, 2024, seems plausible but not guaranteed.

ChatGPT 4's Forecast: Conservatively, the price range could be between $40,000 and $60,000, considering potential market fluctuations and investor caution. On the other hand, the price could potentially vary between $60,000 and $80,000, aided by implementation and investments following ETF approvals and the halving.

Bing AI from Co-Pilot Creative's Forecast: Based on information gathered from various sources, the forecast for the price of bitcoin on December 31, 2024, is around $75,000.

Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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