As ETF hype builds, Bitcoin tops $40,000.

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Despite some obvious setbacks, such as the leadership change at Binance, Bitcoin’s continued upward trend is turning into a resounding success with the price crossing $40,000.

Things are going smoothly for Bitcoin recently. Not only has the general trend in valuations steadily increased throughout 2023, but September also saw this steady growth kick up a notch. There are sometimes claims that this growth will slow or reverse, but in early December the opposite appeared to be true. It looks like a real bull market. It was worth $25,000 in early September, and soon surpassed $40,000 in December.

One of the clearest signs that the hype train is about to slow down was the Binance event. Despite being the world’s largest digital asset exchange, the company lost its crown last November when it pleaded guilty to financial crimes in the United States, leading to the ouster of its CEO and billions of dollars in fees. As competitors move to steal market share from Coinbase, one question comes to mind for skeptics: Why isn’t Bitcoin suffering more damage? When the industry’s leading exchange, such as Mt. Gox or FTX, fails, Bitcoin often suffers a major blow. “Crypto” seems to be getting hit hard right now, but Bitcoin is shining brighter than it has in a year and a half. Where does this solidity come from in such an unstable asset?

The most commonly cited reason for all this success was the feeling that a victory for the Bitcoin spot ETF was imminent. Exchange-traded funds (ETFs) are a new financial product whose valuation is directly tied to Bitcoin, giving them very broad access to the US market. Anyone can buy Bitcoin, but ETFs will mark a whole new level of prominence and acceptance. Anyone can buy Bitcoin without having to understand or fully appreciate the concept of self-management, like buying a pension or mutual fund. The SEC continues to drag its feet in securing firm approval, but it is generally believed that the fight is nearing an end. bloombergFor example, the ETF is publicly cited as the reason for predicting a Bitcoin price of $500,000 by the end of the upcoming cycle.

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But there is more to this belief than mere collective fantasy. While it is difficult for an unelected board like the SEC to be directly swayed by public opinion, there is real power coming to the Bitcoin ETF side. For example, BlackRock, the world’s largest asset manager, continues to play a prominent role in the ETF fight, filing its first petition with the SEC and weighing in on the legal fight. It was revealed on December 5 that he had been shot in the arm. On October 27, an unknown investor contributed $100,000 to add capital to the company.

Cases like this have shown Bitcoin’s real staying power. This is because these large institutions have contributed to overall optimism that can be measured in a variety of ways. For example, the desire to “hold” Bitcoin and refuse to sell it for years was seen as gospel by many Bitcoin users. It’s clear that this has been quietly increasing over the past few months. In August, before the rally had even begun, Bitcoin holdings on major exchanges fell to their lowest level in five years. But in the intervening years of success, the trend exploded.

This increase in self-custody may indicate a few different trends. First of all, especially in light of what happened at Binance, this could simply mean that more and more Bitcoin users want to take advantage of the blockchain’s radical options for self-management. Why keep your money on the exchange if you don’t need it? An important thing to note is that there is a tendency to pull bitcoins off exchanges for their own storage rather than simply selling them for fiat. That is, people expect its value to continue to increase, and they expect it so thoroughly that it is becoming increasingly difficult to find sellers. And as you can see from these price movements, it’s a smart move.

In this space, some positive movements will influence each other. It’s clear that Bitcoin’s technology will have a revolutionary impact on monetary systems around the world, but it doesn’t matter when the speculative value is good. For example, consider the case of El Salvador, the Central American country that shocked the world by making Bitcoin a fiat currency. There were many benefits, including an influx of tourism dollars and new jobs created along with the nascent digital asset industry. However, the country also invested directly in Bitcoin, which became the subject of ridicule from many vested media outlets. With Bitcoin “failing” and “imploding,” the country had “little to show for it” in terms of dollars and cents in investment.

But now El Salvador President Bukele has proud The claim is, “El Salvador’s Bitcoin investment is in surplus!” “Despite thousands of articles and hits mocking our expected losses,” he said, “if we sell our Bitcoin, we will not only recoup 100% of our investment, but also earn a profit of $3,620,277.13 USD (as of today).” Moment).” Of course, he added, the government has no plans to sell any of them. El Salvador has been purchasing Bitcoin at a steady pace, and it is a true sign of success that the country can say that even this decision was justified. New jobs and tourists will come either way, but in the end it’s best to prove the haters wrong.

In short, it is a very positive sign that Bitcoin is performing well in this environment and is enjoying its best news in years. Some of the biggest rallies, such as those in 2017 and 2021, have been rapid, with few signs of success. Now we have undeniable signs. Bitcoin has been a months-long period of great turmoil in the “crypto world”, with the world’s leading digital asset barely noticed. It’s important to remember that some of the biggest crashes have occurred without warning, and many were directly caused by the exact same types of problems that Bitcoin is currently going through. Who knows where we will be once the ETF is approved? Who knows what benefits it will bring to the world? In any case, a more resilient Bitcoin is poised to move into the future, and it looks very bright indeed.