The unexpected reasons behind the rise of bitcoin and altcoins

Sun 05 May 2024 ▪ 3 minute read ▪ by Luc Jose A.

After casting doubt on the possibility of a post-halving rally, Bitcoin reignited the flame by reaching $63,000 on May 4. In its run, the original cryptocurrency has, as usual, dragged along several other major altcoins such as ETH, SOL, CAD, etc. In the space of 24 hours, even as trading volumes fell by nearly 18%, the momentum increased the overall cryptocurrency market capitalization by 5.11%. Obviously someone would like to understand what caused this turnaround. Is it time for a raise already? Is it a deception? Details follow.

Recovering interest in Bitcoin ETFs restores confidence

JPMorgan had forecast an average of Bitcoin post-halving at $42,000. It seems that the American bank’s calculations were not very accurate, because what we are witnessing right now seems to be a general market recovery.

The signs are clear. We saw Bitcoin hit $63,000 in 24 hours and altcoins make sustained progress since. We also saw the overall cryptocurrency market capitalization reach $2.34 trillion, up 5.11% in 24 hours.

This market recovery is no coincidence. In fact, thanks to recent American data which has given investors confidence, 370 million dollars have flowed into Bitcoin ETFs. This renewed interest, after the dramatic drop to $34.4 million on May 2, has significantly strengthened market confidence in cryptocurrencies. This confidence was further strengthened by Hong Kong’s acquisition of 4,128 BTC in three days, having recently adopted Bitcoin and Ethereum ETFs.

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The accumulation of cryptocurrencies during recessions

The recovery of the cryptocurrency market was also caused by a change in the investment strategy of institutional clients. Indeed, as recently indicated by Fidelity Digital Assets, numerous pension funds and wealthy individuals are showing a growing interest in cryptocurrencies.

Several experts also noted that the accumulation of high-potential cryptocurrencies during periods of decline also contributed to the overall market recovery.

It can be understood that the combination of these factors has helped to breathe new life into the cryptocurrency market, which had been suffering from a lethargy that had lasted quite a long time. For many, it is time to act. We hope so Bitcoin will set a new record in the next six to nine months.

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Luc Jose A.

Graduated in Science Po Tolosa and holder of a blockchain certification consultant issued by Alyra, I returned to participate in Cointribune in 2019. Capturing the potential of blockchain to transform numerous sectors of the economy, I have made a commitment to raise awareness and inform the great public about this constantly evolving ecosystem. My goal is to allow anyone to better understand blockchain and learn about the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to convey the latest technological innovations and to put into perspective the economic and social efforts of this revolution in brands.

DISCLAIMER

The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.

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