After a catastrophic 2022, marked by the collapse of several major currencies, numerous bankruptcies and scandals that saw more than $2 trillion evaporate from the market, the crypto community looks toward the future with both fear and enthusiasm. Last year’s resounding decline has scared away traders and investors but has also made them eager for a new bull run. Everyone would want to have the certainty that the market will soon recover, but as we’ve come to learn over the years, nothing is certain when it comes to crypto. Quite the opposite, anything can happen at any moment, so making predictions is more of a guessing game than a science.
Still, there is some good news coming from the crypto space right now, especially with regard to Bitcoin and Ethereum, the two biggest coins in the market at the moment. The Bitcoin price has recently soared above the $ 31,000 threshold again and continues to hold this position despite temporary price fluctuations. If market conditions remain favorable, the king of crypto might experience further appreciation in the upcoming months. At the time of writing, Bitcoin was trading $ 31,010, with a 14% increase over the past month.
Things are looking up for Bitcoin
Looking at the bigger picture, we can safely say that Bitcoin started the year on the right foot, jumping more than 80% so far and outperforming most coins in the market. Does this mean that Bitcoin is out of the woods and investors can resume their normal activity? It might be too early to declare that given the current state of the economy and the latest developments in the cryptocurrency industry. If we compare Bitcoin’s current value with its all-time high of $68,789 reached in November 2021, a few months before the market came crashing down, we can clearly see that the original crypto still has a long way to go to return to its former glory.
Besides, stability has never been one of Bitcoin’s strongest suits, or any other crypto’s for that matter. Bitcoin briefly managed to surpass the $31,000 mark a couple of weeks ago, shortly after BlackRock, one of the world’s leading providers of investment, advisory and risk management solutions, announced they filed an application with the U.S. Securities and Exchange Commission (SEC) for a Bitcoin spot exchange traded fund (ETF). However, Bitcoin’s value dipped slightly over the following days and only got back above $ 31,000 on June 3rd. This shows that Bitcoin remains as volatile as ever but is also gaining bullish momentum.
Bitcoin’s recent surge can be attributed to several factors, but experts believe that the increased interest from institutional investors, as reflected by BlackRock’s application, and the emergence of a new crypto exchange called EDX Markets seem to be the main drivers of the price rally. Fidelity, a Boston-based investment giant, has also followed BlackRock’s example and refiled their ETF application with the SEC.
Although the SEC has allowed the trading of Bitcoin ETFs on exchange platforms, it has maintained a firm position with regard to spot applications, denying every single one of them so far and citing a lack of adequate measures to prevent fraud and market manipulation as a reason. What’s more, the commission has labelled BlackRock’s and Fidelity’s recent filings as inadequate, even though this doesn’t equate to rejection.
Despite the SEC’s reluctance to approve ETF applications, the actions taken by major Wall Street firms suggest that the demand for crypto products continues to rise. This is also encouraging more institutional investors to pour their money into crypto. According to investment firm CoinShares, the total investments in crypto products registered over the past week amounted to nearly $ 125 million, with Bitcoin getting most of the attention.
Ethereum follows suit
Bitcoin is not the only crypto that’s been rallying in recent weeks. Ethereum, the second-largest crypto by market cap and the most popular altcoin, is also following in Bitcoin’s footsteps and getting closer to the $ 2,000 mark with every passing day. At the time of writing, Ethereum was trading for $ 1,958, with a 2.73% gain over the past 30 days. Just like Bitcoin, Ethereum’s all-time high of $4,815 was registered in November 2021, so the crypto remains almost 60% down from its peak performance. But 2023 has been a good year for Ethereum as well, with the ETH price trending upward for most of H1.
Ether managed to break the $ 2,000 resistance earlier this year for the first time since August 2022, one day after the completion of the much-anticipated Shapella upgrade on April 12th. The upgrade represented the final step in the network’s transition from proof-of-work (PoW) to proof-of-stake (PoS), allowing validators to finally withdraw their staked funds along with all the rewards accrued over time. The success of the Shapella upgrade caused the ETH price to spike one day after its completion, although the increase was short-lived. The correction that followed caused the price to hover below $ 2,000 for the following months, but the current trend shows that Ethereum might pass the threshold once again.
Meme coins, which many believed to be dead, have also experienced a resurgence recently, with Pepe being the most prominent of all. The coin has become a major hit in a relatively short period of time, although its value dropped considerably after the initial spike. Nevertheless, Pepe has jumped almost 15% in the past week, signalling that meme coins might be back on investors’ radars.
As usual, the crypto market is full of surprises. But it seems that for once these surprises are positive and might lead to even better news in the future. The bullish momentum gained by Bitcoin and Ethereum is instilling a bit of optimism in the market, which could indicate the end of the crypto winter and the onset of a new period of prosperity for the industry.