It seems like Bitcoin has finally had enough of the correction that began in early August. This descent took the price from around $30,000 to as low as $25,000, causing turmoil among both the bulls and bears through market liquidations. Now, it appears to be gearing up for a continuation of the bull market. Some have yet to learn that, in the long run, investing often proves more profitable than trading.
You might find it peculiar that someone would label Bitcoin's current price action as the start of a bull market. However, it indeed is a bull market; it's just that we're in its early stages. The bull run, however, typically begins after the halving. In my opinion, we should differentiate between the bull market and bull runs, as they carry distinct meanings.
Regardless, history has shown us that halvings are pivotal catalysts in kickstarting Bitcoin's bull runs. Some argue that factors such as the DXY, liquidity, and various others push Bitcoin higher every four years. I'm a simple-minded individual, and I'll stick with the halving theory.
The big question on everyone's mind is: when will we see a $1 million BTC? Well, before attempting to answer that, let's ponder whether it will ever reach such a valuation. It remains to be seen, but unless something superior emerges, there's a good chance we'll witness Bitcoin reaching the $1 million mark at some point.
Comparing Bitcoin to gold might seem futile to some, but when Larry Fink, the CEO of BlackRock, publicly likened Bitcoin to digitizing/tokenizing gold, it prompted us to explore gold as a source of answers regarding Bitcoin.
BlackRock, along with several other investment funds, recently applied for a Bitcoin spot ETF. So far, the SEC has stubbornly delayed its response. My take is that once one ETF is approved, it will trigger a cascade of approvals for other companies. The SEC can only prolong this process for so long, and I suppose it will persist until Gensler vacates the chair.
Examining the price of gold, we notice that after its ETF approval, gold witnessed a 345% rally in its dollar valuation. While this might be a modest gain for Bitcoin, a 3.5-fold increase in Bitcoin's price post-ETF approval is nothing to disregard.
I believe Bitcoin won't linger below $30,000 for much longer. If BTC's price hovers around $30,000 when the ETF is approved, it implies we'll reach a $100,000 BTC in no time. Gold's rally took several years to unfold, but in the realm of crypto, things transpire far more swiftly.
Now, what precisely is a Bitcoin spot ETF? Here's what ChatGPT (my alternative to Google) clarified:
"A Bitcoin spot ETF, or Bitcoin exchange-traded fund, is a financial product designed to provide investors with exposure to Bitcoin's price movements without necessitating direct ownership or management of the cryptocurrency."
"A Bitcoin spot ETF essentially holds Bitcoin and aims to mirror its current spot price. Investors can purchase ETF shares, representing a portion of the actual Bitcoin holdings within the fund."
Although a Bitcoin spot ETF won't drastically boost Bitcoin's mass adoption as originally intended, it will offer "easier and safer avenues" for various investors to access the crypto market. My gut feeling suggests that we won't witness trillions of dollars pouring into BTC within days or weeks of ETF approval. Instead, it'll likely rely on retail participation, much like the 2017 bull market, to reach the coveted $100,000 BTC.
Some may argue that Bitcoin stands no chance of reaching a $100,000 valuation within the next couple of years, but I beg to differ. Even the average person acknowledges that fiat currencies are consistently losing purchasing power, and there's a dwindling chance of saving the sinking fiat ship. Additionally, there's the looming threat of Central Bank Digital Currencies (CBDCs), which will be marketed as "saviors" of the current financial systems.
So, why wouldn't BTC eventually reach $1 million... someday?
Thanks for your attention,
Adrian
