Anil Singhvi decodes why Bitcoin has soared 125% in 8 months and 25% in 1.5 months
Bitcoin cryptocurrency had a lacklustre show in 2022 when its price fell more than 65 per cent. It showed no signs of revival till almost the middle of 2023. But in June of the same year, an event triggered investor interest in Bitcoin. From there, Bitcoin staged fast recovery and rose from $25,000 to its current level of over $57,000. Market wizard and Zee Business managing editor, Anil Singhvi, reveals the causes behind this quick recovery and why people are keenly interested in Bitcoin.
The coronavirus pandemic saw the rise and fall of the cryptocurrency Bitcoin. The cryptocoin skyrocketed around 300 per cent in 2020 and over 64 per cent in 2021. But once the World Bank and local governments across the globe denied recognising cryptocurrency, including Bitcoin, as legal tender, the rise of Bitcoin, like many other cryptocurrencies, hit a roadblock. In 2022, the Bitcoin price slumped by more than 65 per cent, and it appeared that the game was over for the cryptocurrency.
The turnaround came in June 2023, when an event turned out to be the main cause of the resurrection of Bitcoin.
From that point till now, Bitcoin has skyrocketed by more than 125 per cent, rising from a mere $25,000 to today's price of over $57,000, Zee Business reported.
Zee Business managing editor Anil Singhvi decodes the reasons behind the spectacular recovery in Bitcoin.
Anil Singhvi on why Bitcoin regained momentum
Market wizard Anil Singhvi said that Bitcoin gained momentum when BlackRock, one of the world's leading investment management firms, announced launching a Bitcoin Exchange Traded Fund (ETF) in June 2023.
"Bitcoin was trading at $25,000 at that time. But a proposal coming from as big a wealth management company as BlackRock sparked people's interest in Bitcoin," said Singhvi.
"Bitcoin had a problem: if you forgot the password, it was bad for you. On the other hand, there was always a danger of it being hacked. But once BlackRock announced launching an ETF, people thought that those two risks were gone," said Singhvi.
However, no ETF can trade until the US Securities and Exchange Commission gives it the go-ahead.
The exchange took time to give its approval to the Bitcoin ETF.
It was only on January 10, 2024, that the US market regulator gave its nod to the ETF.
Bitcoin ETFs traded on the US exchange for the first time on January 11, 2024.
The first 11 approved spot Bitcoin ETFs came from BlackRock, BZX, Grayscale, Hashdex, Bitwise, Valkyrie, Invesco, WisdomTree, VanEck, Franklin, and Fidelity.
Just in the last one and a half months since the ETF launch, Bitcoin has soared over 25 per cent.
On Tuesday, BlackRock Bitcoin hit a record volume of over $1.3 billion for the second consecutive day.
"After BlackRock launched the ETF in January, Bitcoin got people's recognition as they thought that if BlackRock is starting a fund, then Bitcoin investment is safe and people can have faith in such an asset class. People are believing that Bitcoin can be the best performing asset this year. They are thinking that Bitcoin returns can surpass those of debt, equity, gold, and real estate in 2024. After a fall in 2022, Bitcoin rose 125 per cent in 2023," Singhvi added.
It's on a meteoric rise this year too. It is yet to be seen if it continues to scale new heights or the rise pauses.
(With inputs from agencies)
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