Bitcoin has been on a tear lately, almost reaching a new all-time high. But can it keep going?
Stablecoins Are Running Out of Steam
CryptoQuant CEO Ki Young Ju thinks the current buying pressure on Bitcoin might be unsustainable. He points out that stablecoins, which are used to buy Bitcoin, aren’t providing enough liquidity. Stablecoins are like digital dollars, so they’re a popular way to buy volatile assets like Bitcoin. But most stablecoins are being held for storage or transfers, not for trading.
Bitcoin ETFs to the Rescue?
Young Ju believes Bitcoin ETFs are the key to keeping the rally going. These ETFs allow investors to buy Bitcoin without actually owning the cryptocurrency. They’ve been attracting huge amounts of money recently, with BlackRock’s IBIT ETF leading the way. If these ETFs keep up the momentum, they could provide the liquidity needed to sustain Bitcoin’s price.
What Happens If the ETF Hype Dies Down?
If the flow of money into Bitcoin ETFs slows down, it could lead to a drop in Bitcoin’s price. This is because brokerage firms like Coinbase Prime rely on these ETFs to buy Bitcoin. If they stop buying, the demand for Bitcoin could fall, causing the price to drop.
Looking Ahead
Bitcoin is currently trading around $69,000, but it could easily bounce back above $73,000 if the ETF inflows continue. The upcoming US elections could also play a role. If Donald Trump wins, it could be a big boost for Bitcoin, potentially pushing the price to $90,000 or even $100,000 by the end of 2024.
