Bitcoin has recently experienced a significant surge in price, surpassing the $41,000 mark for the first time in 19 months. As a result, numerous short positions have been liquidated within the past 24 hours. While some believe that this indicates the start of a bull run, others predict that it will occur after the 2024 Bitcoin halving. However, Jeroen Blokland, a renowned money manager and ‘multi-asset investor,’ believes that this rally is distinct from the previous instance when the cryptocurrency reached these price levels.
Last year in May, Bitcoin achieved a value above $40,000 but subsequently faced a decline in price due to crypto scandals and overall market pessimism. Blokland suggests that the current rally diverges from the previous situation because it’s driven by the growing acceptance of Bitcoin as a legitimate asset class rather than just the anticipation of the halving event. The forthcoming Bitcoin halving is scheduled for April 2024, occurring approximately every four years and reducing the production of new BTC by half. Historically, this event has correlated with substantial price increases and significant bull markets across the entire cryptocurrency industry.
As we approach the end of 2023, the month of December poses as an interesting period for the cryptocurrency markets. The US Federal Open Market Committee (FOMC) will hold a meeting on December 13th to review its anti-inflationary policy and decide whether to adjust inflation rates. The majority of experts predict that the rates will remain unchanged, likely contributing to the recent uptick in risk-on markets such as crypto.
In conclusion, the current surge in Bitcoin’s price above $40,000 is believed to be driven by Bitcoin’s increasing acceptance as a recognized asset class rather than solely by the anticipation of the upcoming halving event. The significance of this rally lies in the differentiation it presents compared to the previous instance when Bitcoin reached these price levels. As we progress further into December, with potential stability in inflation rates, the cryptocurrency markets may continue to witness intriguing developments.
This article originally appeared on CryptoPotato.