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Spot Bitcoin ETF Approval in the US Possible This Month, Affirms Grayscale, Stating ETFs Alone Won’t Solely Impact Bitcoin’s 2024 Price.
The endorsement of spot Bitcoin ETFs is anticipated to attract more participants to digital assets, potentially generating “fresh net demand for Bitcoin,” as per a report by Grayscale on Tuesday. The current “limited supply” of Bitcoin suggests that “new net inflows into the asset should positively impact Bitcoin’s valuation,” stated Grayscale.
However, according to the digital asset manager, ETFs will not be the predominant catalyst for Bitcoin’s future price trajectory. Grayscale researchers emphasized that a “persistent demand for Bitcoin from end investors will ultimately be more crucial for its price than these short-term supply/demand dynamics,” alluding to the ETF approval and the upcoming halving in April 2024, which reduces the rewards for mining new Bitcoin blocks, thereby diminishing the supply. Grayscale likened Bitcoin to a “store of value” asset, comparable to gold, and asserted that its price will be shaped by the factors driving demand for such gold-like investments.
These factors encompass elements such as fluctuations in real interest rates and geopolitical uncertainties.
Grayscale emphasized that while Bitcoin and various other digital assets demonstrated robust returns in 2023, the cryptocurrency realm retains its inherent volatility. Investors are advised to remain vigilant of both the macro and micro factors that can influence crypto valuations, according to Grayscale.
Bitcoin reached a milestone by surpassing $45,000 for the first time in 21 months, trading at approximately $45,300, reflecting a 6% increase since Monday.
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Most experts predict a Bitcoin price of $100,000, expecting it to reach that level sometime in 2025.
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