Bitcoin had been hovering around the
$70,000 level on March 12 but surged later, surpassing its previous all-time highs. On March
14, 2024, it set a new record of
$73,750, with a market capitalization reaching
$1.44 trillion the highest level ever, surpassing the level of November 2021. Both Bitcoin
and the range of the 100 largest currencies have grown by about 70% this year.
In this
article I will express my thoughts over how Bitcoin hit its ATH, the aftermath as well as
how altcoins will be affected because of this.
How did this happen?
A few weeks ago, the US Securities and Exchange Commission approved the first exchange-traded fund (ETF) in bitcoin spot, paving the way for the upward trend. Additionally, investors anticipate the upcoming “halving,” which occurs every four years and halves the supply of new cryptocurrencies, further bolstering its price. The next halving is anticipated around mid-April.
The Aftermath
Bitcoin’s rally is producing around 1,500 new “millionaire
wallets” every day, according to cryptocurrency analytics firm Kaiko
Research. That’s still lower than the rate of millionaire wallets created during
Bitcoin’s bull run in 2021, however, when more than 4,000 wallets a day reached the $1
million mark.
Monetary policy developments strongly influence
the overall market, fostering investment “euphoria”
and increasing risk
appetite. Since the beginning of the year, Bitcoin has surged by over 70%, propelling the
entire market upwards. Smaller tokens like Ether, Solana, and Avalanche are
experiencing gains of 1%, driven by Bitcoin’s momentum. Data from CoinMarketCap shows
that the global cryptocurrency
market currently values at $2.68 trillion, with an increase of almost 1.6% in
the last twenty-four hours.
How will the Altcoins be affected?
In the following month, Bitcoin undergoes an event known as halving, which reduces the supply of new Bitcoin by half. When Bitcoin’s daily production halves, the probability of its price increasing rises. For instance, if the total production of copper halved while demand stayed constant, the price of copper would rise.
The end of the bull cycle
Whenever there is a sudden explosion in Bitcoin, the next question arises about when the collapse will come. In its previous outbursts, including 2013, 2017, and 2021, the digital currency consistently broke its all-time highs, followed by sharp declines.
Previous Bitcoin crashes stemmed from various events: regulatory crackdowns, transaction violations, product crashes, and burst bubbles. The history of Bitcoin seems to repeat itself in a perpetual cycle of boom and bust, drawing many back to the currency every few years.
Conclusion
Bitcoin is making history, reaching a new record and changing the game in the stock market with the approval of ETFs. ETF demand, tight supply, and expectations of looser monetary policy fuel a bullish mood in cryptocurrencies. The upcoming halving in Bitcoin makes this a good time to consider entry into several altcoins (after careful study), expected to thrive this year.
However, one should be mindful of the potential decline that may follow this surge, as seen in previous instances.
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Reference List
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Bitcoin
reaches new all-time high, surpasses Silver in market cap
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13 Altcoins to 10X By Bitcoin Halving