How high can Bitcoin rise after the US approves the ETF?
Author: Zhu Weisha
At the end of last year, the market began speculating on the expectation that the US would approve a Bitcoin ETF (Exchange Traded Fund). Bitcoin rose by more than 50% in less than three months from $37,713 on December 1, 2023 to $57,200 today on February 27, 2024. Will Bitcoin rise again?
This is a definitive answer. How tall is the key?In fact, Bitcoin's peak cannot be predicted in the short term. Long-term forecasting is trend forecasting, just one word: up. To predict the rise of Bitcoin is to talk about experience. Experience only shows the past; it is nothing more than finding a reason for the rise for yourself and the market. If everyone agrees with this reason, it will rise.
Stocks have a phased peak. The valuation logic of Bitcoin and stocks is different. Stocks have price comparison effects between stocks and profit predictions, so they will generate a peak in valuation. However, there is no profit forecast for Bitcoin; it is the valuation logic of the product, that is, the price is determined only by supply and demand, so there is no valuation ceiling. The effect is that the increase in the top stocks is calculated as a percentage, while the increase in Bitcoin without the top is calculated as a multiple.
On January 10, 2024, the US approved the ETF, and the price of Bitcoin rose to 57,000 US dollars from 46,122 US dollars to today, February 27. More than 40 billion dollars of capital flowed into the ETF in just over 40 days, showing strong demand in the market.
This demand is long-term because ETF approval gave Bitcoin a proper name. Bitcoin is no longer air; it is an asset with financial attributes. Those who once said that Bitcoin is air were severely punched in the face. They misled the market and made believers miss historical opportunities. If the believers were anxious, people would rush to get on the bus. Why the rush? Compared to gold and US stocks, Bitcoin is undervalued because Bitcoin has yet to reach an all-time high of $69,000, while gold and US stocks have long surpassed historical highs.
This demand is long-term, because America's leading effect will cause various capital markets around the world to launch their own Bitcoin ETFs one after another, further increasing the demand for Bitcoin. Supported by this long-term demand, from now on, more than $69,000 is a probable event.
Once it breaks $69,000, it will fall first and then rise. A large influx of speculative markets will enter the main upward wave, and when it rises, it is Soros's backlash effect. The academic term is positive feedback. At this time, market sentiment affects prices, which has a good speculative effect. When demand is less than supply, the decline begins. Bulls are short and long, I don't know if it still applies? The greater the coin effect, the less supply, and the longer the bull market, so pay attention to Bitcoin's token index. Currently, 70% of coins are stored.
By April of this year, Bitcoin will be cut in half, supply will be cut in half, and if demand does not change, the price should rise. How much it rises depends on demand. By observing ETF inflows, you can roughly analyze the extent to which Bitcoin should rise.
In addition to observing Bitcoin ETF capital inflows, changes in the market capitalization of cryptocurrency stablecoins are also indicators. This indicator only increased by more than $4 billion from January 10 to February 27. It is clear that ETFs are the mainstream of the rise.
Bitcoin ETFs are defined as alternative investments to hedge against the inflation risk of fiat currencies, and their role is comparable to that of gold. Gold is the boss of value storage, with a market capitalization of 13.7 trillion US dollars. Generally, the boss holds 70% of the market share. As the second-generation Bitcoin, it is possible for Bitcoin to rise to 4 trillion, or 30% of the boss. Bitcoin's increase has a 10-fold effect, that is, a 10-fold increase from low to high in a cycle of 4 years. If the rules don't change, the unit price of Bitcoin is 160,000 US dollars, and the total market value is almost 3.3 trillion US dollars. Generally, the 10x rule will decrease as the size of Bitcoin increases, but the currency is very large. If one percentage point more enters, Bitcoin explodes. Maybe the 10x rule continues to work.
If Bitcoin rises again, surpassing gold, it will require a new narrative, a new demand factor, that is, the implementation of the Bitcoin standard.
The Bitcoin standard is the idea of a two-track monetary system. The meaning is the parallel competitive development of the fiat currency standard and Bitcoin standard. For the principles of Bitcoin standard, see the “Implementation of DW20 Decentralized Basic Coin” on the Chainless.hk website (chainless.hk). Simply put, add a yardstick to Bitcoin, measure global economic development with Bitcoin, and replace stablecoins with DW20. Together, Bitcoin and DW20 form an inflation-free Bitcoin-based system. The distribution principle of DW20 is the same as Bitcoin, and it also requires a process from air to asset coins (stablecoins). The difference is that DW20 uses an airdrop method, and anyone can register to receive it at no cost. DW20 is on the Bitcoin bandwagon, helping Bitcoin. DW20 is like Bitcoin in the early days. It is only easy to profit in the early stages. The earlier you register, the more likely it is to cross the hierarchy. Download link:https://eco.chainless.top/download?code=8613510870809VJYou will receive a big red envelope that will increase, possibly to tens of thousands of yuan.
