Bitcoin saw a surge past $42,000 on Monday before settling around $41,500 at the time of writing. According to popular crypto analyst channel Altcoin Daily, this pump in price is likely due to optimism around the upcoming window for the SEC to approve Bitcoin ETF applications.
Altcoin Daily, which boasts 1.4 million followers on X, noted that a similar dynamic played out with the first gold ETF approvals back in November 2004. Once the spot gold ETF was listed by Wall Street, the price of gold “never came back down again.”
The thinking is that Bitcoin could see a similar permanent step change upwards in price after the first spot Bitcoin ETFs are approved.
As Altcoin Daily noted on X, Bloomberg analysts estimate a 90% chance that the SEC approves the spot Bitcoin ETF applications submitted by major financial players like BlackRock during the January 5th to January 10th window. The belief is that after these critical approvals, Bitcoin’s price may be permanently reset at these higher levels, just as happened with gold in 2004.
In addition to the ETF impact, Altcoin Daily highlighted two other bullish dynamics for Bitcoin relative to commodities like gold. First, while gold supply can be increased to meet higher demand, Bitcoin’s supply schedule cannot be changed – it is set in the code with mining rewards halving every four years. Second, Bitcoin’s next halving is coming soon in 2024, which will cut the new supply of Bitcoin created each day in half.
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With fixed supply plus decreasing new supply being poured into the market, any increase in demand for Bitcoin related to the ETF approvals and other catalysts could send prices exponentially higher. Unlike gold, supply cannot adjust by mining more. So if demand rises while new supply falls, Bitcoin’s price may go parabolic, especially as Wall Street and institutional dollars start flowing into the new ETFs.
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