CryptoNews of the Week

Publish date: Wed, 21 Feb 2024, 09:09 AM
CryptoNews of the Week

– Lucas Outumuro, head of research at IntoTheBlock, forecasts an 85% chance that bitcoin will reach a new all-time high within the next six months, potentially surpassing $70,000. He identifies five growth catalysts.

1. The halving in April, marking the fourth reduction of the mining reward from 6.25 BTC to 3.125 BTC per block, which is expected to decrease selling pressure. Outumuro suggests bitcoin could reach a new all-time high (ATH) just a month after the halving.

2. The continued influx of funds into spot exchange-traded funds (ETFs) based on bitcoin could act as a second growth catalyst. While the duration of this strong inflow remains uncertain, its persistence could bolster the cryptocurrency's price through increased demand.

3. IntoTheBlock believes the Federal Reserve's tight stance on interest rates in 2022 laid the groundwork for a bear cycle not only in the crypto market but also across other risk assets. With inflation dropping from 10% to 3% by 2024, many anticipate a policy shift by the Federal Reserve towards cutting interest rates, likely driving the recent rally in both bitcoin and stocks. The expert notes that bitcoin's price movement has been more closely aligned with traditional assets recently, enhancing its correlation with the Nasdaq and S&P 500 to two-month highs.

4. The US presidential election, although current President Joe Biden is generally opposed to digital assets, the election campaigns tend to have a positive impact on the crypto market. IntoTheBlock's report states, "Polymarket currently gives Biden only a 33% chance of re-election, making Donald Trump, who is significantly more crypto-friendly, the most likely victor." However, to boost the incumbent's re-election chances, the Federal Reserve might adopt a more aggressive easing of its monetary policy, encouraging an influx of funds into both the stock and crypto markets.

5. Hedge funds are considered an unexpected growth driver by Outumuro. He recalls that when bitcoin recovered from the COVID-19 pandemic in 2020, traditional financial giants first acknowledged the cryptocurrency's potential. The introduction of spot bitcoin ETFs provided hedge funds with an opportunity to accumulate a new asset class, thus increasing demand from traditional investors and leading to greater adoption and acceptance of digital assets.

However, IntoTheBlock notes that these scenarios could change due to various factors. For instance, if the Federal Reserve does not ease its policy, bitcoin could face a 10% correction. The development of geopolitical conflicts could also negatively impact the price of digital gold. The experts do not rule out unexpected selling pressure in the event of major player bankruptcies.

– Analysts at investment bank Goldman Sachs have revised their forecast for the S&P 500 index after it surpassed 5,000 points. They have set a year-end target for the index at 5,200, indicating a 3.9% increase from its current level. As previously noted by IntoTheBlock observations, the correlation between bitcoin and the S&P 500 is increasing, suggesting that the coin's value will rise alongside the US stock market.

– According to the Financial Times, hackers linked to North Korea are increasingly turning to artificial intelligence to aid their efforts. In 2023, they launched 1.3 million attacks against South Korean companies and government agencies. Previously, their attempts often failed due to poor language skills and a lack of understanding of local social nuances. Now, North Korean hackers are leveraging artificial intelligence to enhance their effectiveness.

Erin Plante, Vice President of Research at Chainalysis, views this as a significant new threat. "North Korean hacking groups are creating trustworthy profiles on professional sites like LinkedIn. Generative neural networks help them communicate, send messages, create images, and new identities: everything needed to build close relationships with their victims," she explained. "They use detailed profiles on LinkedIn and other social networks to develop relationships over weeks and months." Plante described an instance where North Korean hackers deceived a senior engineer at a cryptocurrency exchange by posing as representatives of a Singaporean company. They asked the victim to perform a "technical test" by downloading software that turned out to be phishing malware.

Moreover, AI services like ChatGPT are assisting North Korean criminals in developing more complex and sophisticated forms of malicious software. The era of poorly worded emails with a "click this link" prompt is evolving into a more cunning approach to cybercrime.

– Dennis Liu, also known as Virtual Bacon, shared his bitcoin investment strategy, emphasizing the importance of identifying the optimal moment to sell an asset, which is as crucial as deciding to buy it. He outlined three elements designed to signal that the market might have reached its peak.

1. The first indicator to consider is the achievement of certain price milestones: $200,000 for bitcoin and $15,000 for Ethereum. Liu's assumption is based on historical cycles and diminishing returns. This is a clear, quantifiable indicator that eliminates guesswork when deciding to exit a position.

2. Liu's second benchmark is time-based. Regardless of the price dynamics of the assets, he plans to exit his positions by the end of 2025. This decision relies on the importance of historical patterns and is based on the analysis of halving cycles and the duration of bull markets.

3. The final element of Liu's methodology involves meticulous monitoring of price patterns, specifically the behaviour of BTC relative to its 200-day and 21-week exponential moving averages (EMAs). Falling below these support levels would signal the need to sell bitcoin.

– Analyst Gareth Soloway suggested that bitcoin could potentially retest the $30,000 mark, especially if the stock market undergoes a correction in the range of 20% to 30%. He referred to a new possible support level for bitcoin as the "line in the sand." "My main line in the sand is the level from $30,000 to $32,000. If we drop there, I will start buying quite large volumes of BTC," he stated.

– Investor and founder of MN Trading, Michael Van De Poppe, believes the main question for traders now is how the price of BTC will change in the coming months. The analyst expects a pullback in bitcoin could occur when it reaches the $53,000-$58,000 level. Therefore, investors should wait for a correction of 20-40% before entering the market. However, "if you buy bitcoin with the intention of holding it for two to three years, and if you believe that over this period bitcoin will grow to $150,000, then nothing should stop you from purchasing it at these [current] prices," Van De Poppe wrote.

– Recently, Erik Voorhees, CEO and founder of the cryptocurrency exchange Shapeshift, discreetly urged Apple to purchase several billion dollars' worth of BTC and to adopt the first cryptocurrency as a payment method in Apple Pay. He believes this move could instantly generate substantial profits for the company and contribute to the further spread of cryptocurrency. A similar idea was proposed in 2021 by Michael Saylor, co-founder of MicroStrategy. "If Apple added support for bitcoin to the iPhone and converted its treasury to the bitcoin standard, it would bring its shareholders at least one trillion dollars," he wrote at the time.

Chen Fang, Chief Operating Officer of BitGo, also spoke about Apple, suggesting that integrating BTC into Apple Pay and the new Apple Vision Pro headset would allow the company to dominate payments in the metaverse.

It's worth noting that Apple, the world's second-largest company by market capitalization, has had a complicated relationship with the emerging cryptocurrency sector. In the Apple App Store, applications related to bitcoin and other cryptocurrencies are regularly removed. Over time, apps like MetaMask, Coinbase Wallet, Trust Wallet, and Damus have faced sanctions. Meanwhile, Apple co-founder Steve Wozniak has called bitcoin a sensible investment choice, revealing that he once made significant investments in this digital asset.

– Over the past week, Ethereum has significantly outpaced bitcoin in terms of growth rate. According to Standard Chartered bank, the coin's price could rise to $4,000 in anticipation of the U.S. Securities and Exchange Commission (SEC) approving spot Ethereum ETFs. Bernstein analysts believe the likelihood of this happening is substantial: nearly 50% for a launch by May and almost 100% within the next 12 months. "Ethereum, with its dynamic yield rates, environmentally friendly design, and utility in creating new financial markets, has strong potential for widespread institutional adoption. It is likely the only digital asset alternative to bitcoin that could receive clear ETF approval from the SEC," Bernstein suggests. Analysts believe that officials may be influenced by the fact that participants in the traditional stock market are not only looking to launch spot ETFs on Ethereum similar to bitcoin ETFs but also intend to "build more transparent and open tokenized financial markets on the ETH network, where the utility goes beyond mere asset accumulation."

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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