The recent Bitcoin spike stalled before it really began, but the forces behind it might signal a long term rally imminently.
While Bitcoin, and with it the rest of the crypto market, has been in a sordid state following the recent collapse below $6,000, investors are obsessively looking (and hoping) for the way back up. A few days ago Bitcoin saw a promising spike to the $3,600 level which, while not fulfilling hopes of a $4,000 BTC, might show a promising future for crypto, according to Nigel Green, the CEO of the financial consultancy group deVere.
Green, a post on deVere’s blog, points to three main factors behind the upswing: advancements in the Lightning Network, positive advancements in the possibility of a Bitcoin ETF, and the fact that the Bitcoin ‘halvening’ is coming ever closer.
The Lightning Network is certainly making great strides: recently it surpassed 6,000 nodes on the same day that Jack Dorsey announced on a podcast that he is considering integrating the Lightning Network with the Square app, among the most popular payment applications being used today.
The Bitcoin ETF is making a lot of movement towards approval and regulation, with Green pointing to a leaked interview with an SEC commissioner who noted that approval could be quite soon. There has been widespread speculation that a Bitcoin ETF is just around the corner. Tom Edelman today stated he believes the ETF’s imminent approval is ‘virtually certain.’
That just leaves Bitcoin’s ‘halvening,’ the moment when mining rewards are cut in half, which is baked into the design of Bitcoin itself. This event is still 456 days away, but its effects on investment strategy are likely already being felt. The halving event historically has caused Bitcoin prices to surge in the past.
Green’s point isn’t to start celebrating yet, but these market forces are only improving. While there are of course innumerable factors involved in the price of any asset, these three aspects likely will dominate the investment strategy of anyone in crypto through the next year, and there’s valid reasons to predict that they will push prices upward.