Now that Bitcoin has broken above $70,000 and then surpassed the $71,000 price level this week, market participants are watching the global biggest cryptocurrency’s price action closely.
They are striving to understand if BTC is likely to get over the $75,000 mark as early as this summer or not. Now that Bitcoin is trading above $71,000, this prospect seems very much likely to many but everyone remembers that the cryptocurrency market remains very much volatile and can often make both pleasant and nasty surprises to investors and traders.
Bitcoin’s Key Bullish Drivers This year: ETFs and Halving
The first major bullish driver for Bitcoin’s growth this year was the widely-discussed approval of spot Bitcoin exchange-traded funds (ETFs) in January when the American Securities and Exchanges Commission (SEC) spearheaded by chairman Gary Gensler finally gave this venture a green light and blessed these crypto ETFs for trading. Among these companies were such prominent Wall Street behemoths as BlackRock, VanEck, Bitwise, Fidelity, and Grayscale.
The SEC approved eleven funds and as they began trading on stock exchanges in the form of ETF shares, the issuers started scooping up enormous amounts of Bitcoin daily in order to back their products that began trading. Every day, these funds purchased by rough estimates about 12x BTC miners could produce.
Back then, Bitcoin mining pools minted 900 BTC per day, therefore the amount of Bitcoin sucked up by these funds on a daily basis was somewhere around 10,000 – 12,000 BTC. However, not all of them were accumulating Bitcoin. Grayscale was the only ETF that started losing it as its investors got a chance to withdraw their BTC from Grayscale Bitcoin Trust and they began to do that. Besides, the company also had to sell some of its BTC holdings.
The next big driver for BTC was the much-awaited event called halving – a certain block minted by miners after which block rewards for miners got slashed down by half. Halvenings happen once in every four years, around April-May. This year, this remarkable event took place in the middle of April and after that the daily-produced amount of BTC turned from 900 to 450 Bitcoins with one block reward reducing to 3.125 from 6.25 BTC.
Still, the ETFs continued to accumulate Bitcoin at a high pace. On June 6, they purchased 6,907 BTC (worth $492.4 million) with BlackRock adding 2,186 BTC ($155.86 million) and Fidelity surpassed BlackRock’s IBIT ETF by buying 3,104 BTC ($221.3 million). Earlier this week, the ETFs inhaled the second biggest daily inflow since January worth more than $800 million.
Fed Reserve Rate Сut Hopes
After the purchases on June 6, the BlackRock ETF holds 297,644 Bitcoin worth $21.22 billion and Fidelity owns 173,715 Bitcoin valued at $12.38 billion. As some Bitcoin experts keep pointing out, the ETFs are creating a demand shock for BTC, while the halving created a supply shock by reducing the amount of newly-minted Bitcoin by 50%.
Since the funds continue to accumulate Bitcoin, the demand shock will definitely meet the supply shock at some point, these experts, like Adam Back, CEO of Blockstream, say, Bitcoin price will go through the roof and will at the very least soar as high as $100,000.
Former Blockstream CSO Samson Mow tweeted this week that once Bitcoin surpasses the recent all-time high of $74,000, the regular purchases by the ETFs and other market participants will quickly push the world’s major cryptocurrency to the $100,000 level.
The last but not the least ball point on the list of Bitcoin bullish drivers is the growing expectations for the US Federal Reserve to finally perform an interest rate cut this year. Initially, Jerome Powell, the head of the Fed, hinted last year that in 2024, the Fed will begin to reduce the rates after raising them through the past three years.
However, due to the inflation still being strong and maintaining its positions, during the FOMC meeting in March a decision was made to make just one rate cut in November rather than three as was planned initially.
Will Bitcoin Hit $75,000 This Summer?
During the last few days, Bitco inin has made two attempts to break through the $71,600 resistance level – on June 5 and June 6. Earlier today, BTC printed a rise to break above this level but it was pushed back and is currently trading at $71,045.
Earlier this week, BTC went up sharply, adding almost 4% and surging from $68,680 to the $71,250 mark. Should Bitcoin keep up this fast pace, the answer to the question if it can blast the $75,000 level this summer can be positive.
What is more, some financial experts are making price predictions that seem to analysts to be somewhat exaggerated. For example, Robert Kiyosaki (widely known as the author of the “Rich Dad, Poor Dad” book) tweeted that he expects Bitcoin to climb to a whopping $350,000 by August 25. Several analysts in the comments debated with him on that high price expectation, showing that BTC will unlikely be able to go up that high in such a short term.
