The unexpected reasons behind the rise of bitcoin and altcoins
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After casting doubt on the possibility of a post-halving rally, Bitcoin has reignited the flame by reaching $63,000 on May 4th. In its race, the original cryptocurrency has, as usual, pulled several other major altcoins such as ETH, SOL, CAD, etc. Within 24 hours, even though exchange volumes fell by nearly 18%, the momentum increased the overall market capitalization of cryptocurrencies by 5.11%. Obviously, some would want to understand what caused this reversal in trend. Is it already time for an increase? Is it a deception? Details follow.
The resurgence of interest in Bitcoin ETFs restores confidence
JPMorgan had predicted a post-halving Bitcoin at $42,000. It seems that the American bank’s calculations were not very accurate, because what we are seeing right now appears to be a general market recovery.
The signs are clear. We have seen Bitcoin reach $63,000 in 24 hours and the altcoins make sustained progress since then. We have also seen the overall market capitalization of cryptocurrencies reach $2.34 trillion, an increase of 5.11% in 24 hours.
This market recovery is not incidental. Indeed, thanks to recent American data that have given investors confidence, $370 million flowed into Bitcoin ETFs. This renewed interest, after the drastic decrease to $34.4 million on May 2nd, has significantly strengthened the market’s confidence in cryptos. This confidence was further boosted by the acquisition of 4,128 BTC by Hong Kong within three days, having recently adopted Bitcoin and Ethereum ETFs.
The accumulation of cryptos during downturns
The crypto market recovery has also been caused by a change in the investment strategy of institutional clients. Indeed, as recently indicated by Fidelity Digital Assets, numerous pension funds and wealthy individuals are showing a growing interest in cryptocurrencies.
Several experts have also noted that the accumulation of high-potential cryptocurrencies during periods of decline has also contributed to the general market recovery.
It can be understood that the combination of these factors has contributed to breathing new life into the cryptocurrency market, which was suffering from a lethargy that had lasted long enough. For many, it is the moment to act. We hope that Bitcoin will establish a new record in the next six to nine months.
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Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
