Thus, the largest crypto asset in the world has not stopped rising since the beginning of last February and has accumulated an increase of nearly 70% so far in 2024.
According to data from the media ‘CoinDesk’, this new rise in Bitcoin raised the annualized premium of three-month futures on the main crypto exchanges above 25%. Without going any further, this yield is six times higher than that of the 10-year US Treasury bond, which barely exceeds 4%.
According to analysts, this new increase could attract ‘cash and carry’ operators, boosting overall market liquidity. This is a neutral strategy that seeks to profit from price discrepancies in the spot and futures markets, combining a long position in the spot market with a short position in futures when they are trading at a premium to spot prices.
As futures expiration approaches, the premium dissipates, and on settlement day, futures converge with spot prices, generating a return with very little risk.
Bitcoin: price projection
Be that as it may, analysts seem to agree that the queen cryptocurrency will continue to rise in the coming months and has options of reaching 6 figures, and could even reach US$120,000 at some point in the fourth quarter.. According to Bitfinex experts, the peak of the current bullish cycle will be reached sometime next year.
Likewise, these strategists highlight that exchange-traded funds (ETFs) are not showing any signs of weakness and will continue to be a fundamental factor in the coming months, since they “have introduced passive demand” to the market.
The truth is that it is difficult to explain these latest increases without the effect that ETFs have had on Bitcoin prices. Following an initial period of doubt and adjustment by Grayscale Bitcoin Trust (GBTC), these investment products have fully captured market interest and grown at an exponential rate.
On February 12, barely a month old, the ETFs as a whole already had more bitcoin under management than MicroStrategy, the largest institutional cryptocurrency holder in the world. Today, less than two months since its birth, BlackRock’s iShares Bitcoin Trust (IBIT) fund already has more bitcoin than the company founded by Michael Saylor.
According to the latest data, IBIT holds about 196,000 bitcoins, putting it about 3,000 tokens higher than MicroStrategy’s holdings. It should be noted that the company has likely increased its holdings of 193,000 BTC since its last earnings report, as the firm recently increased its capital by $700 million with the intention of increasing its investment in the king crypto asset. On the contrary, it is worth noting that, in this period, GBTC has reduced its holdings by around 200,000 BTC.
While it is true that optimism is at levels that are difficult to repeat, it is also true that the volatility in the market is palpable. In fact, last week Bitcoin fell sharply after breaking the all-time high of November 2021 and also after exceeding US$70,000. This volatility has some experts wondering how sustainable the rally is in the short term and how much speculation about future declines is involved in these sharp rises. In this sense, the Crypto Fear & Greed Index is once again in the territory of “extreme greed” and is close to 90 points.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
