Bitcoin Moves To Reclaim All-Time High: Is This Your Last Chance To Buy Before $100,000?

After dazzling the investing world with its breathtaking 12-fold rally in the aftermath of the COVID-19 pandemic, Bitcoin BTC/USD has drawn out investors who had invested at the peak of its 2021 bull run for nearly two and a half years.

However, with the Securities and Exchange Commission (SEC) greenlighting BTC exchange-traded funds (ETFs) early this year, trading volumes and investor optimism have only been trending higher ever since.

Consequently, BTC has scripted another stellar rally from its September 2023 low of $25,200 to ascend to a new all-time high (ATH) of $69,208.79 on Tuesday.

Representing a 175% return over the past six months, key technical triggers and BTC’s strong price action could portend a leap towards the hallowed $100,000 mark.

Regulated Access Through ETFs To Boost Investor Confidence  

While BTC ETFs based on futures products were already approved in 2021, applications for spot BTC ETFs that promise higher regulatory safeguards and potentially better returns were still being rejected by the SEC till early 2023.

What followed was Grayscale’s long protracted legal battle with the SEC, ultimately leading to the agency being directed to review its decision to reject the former’s Grayscale Bitcoin Trust GBTC application.

Accordingly, the SEC approved 11 applications for spot BTC ETFs in January 2024, many of which belonging to investment giants like Blackrock Inc. BLK, Franklin Templeton, Fidelity and Vanguard among others.

For those wary of purchasing and holding BTCs in their Bitcoin wallet, spot BTC ETFs introduce a passive way of investing in the world’s largest cryptocurrency, allowing investors to instead hold BTC ETF units instead of actual Bitcoin.

Moreover, the higher fidelity to underlying BTC price movements, greater liquidity and lower expense ratios offered by such ETFs make them a better investment instrument for the more discerning investor.

As a result, the spot BTC ETF market is expected to grow by leaps and bounds, with Bloomberg predicting it to receive more than $100 billion in inflows by the end of 2024.

Also Read: Meme Coin Mania: Can Solana's BONK, WIF Topple Dogecoin And Shiba Inu?

Portfolio Diversification With Bitcoin To Soon Be Mainstream

With traditional finance (TradFi) giants leaping onto the BTC bandwagon, it is only fair to assume that Bitcoin will soon feature more prominently in the portfolios of retail investors.

Investment firms like Fidelity have already launched products that have exposure to various asset classes, with 1%-3% of the total allocation going towards its spot BTC ETFs.

If this trend gathers momentum, especially in the scenario where BTC heads higher toward the $100,000 level, we could see large-scale adoption that could in turn increase demand for Bitcoin even further.

That said, since these spot BTC ETFs will invest in Bitcoin directly, any fall in BTC prices could deter investors who have weathered the previous bear cycle.

Supply Shocks From The Upcoming Bitcoin Halving Event Could Drive Prices Higher

While increasing fund inflows into spot BTC ETFs will push demand for Bitcoin even higher, the much-anticipated Bitcoin halving event could potentially reduce supply even further.

Expected in April 2024, this event would see Bitcoin mining rewards being slashed from 6.25 BTC per block to 3.125 BTC per block, limiting the number of BTCs that can be mined daily.

Additionally, with about 900 Bitcoin currently being generated each day, the resultant supply reduction should bode well for BTC’s short-term price appreciation potential.

Taking a cue from history, which has demonstrated that Bitcoin’s price moved up after each of the previous three halving events, there is no reason to believe the same cannot be repeated after its fourth halving event.

Read Next: Bitcoin Options On Horizon? Grayscale Pushes For Regulatory Approval

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