Bitcoin
Why is Bitcoin’s current bull rally the ‘most hated’?
Investors are rushing to buy Bitcoin amid price surges and decreasing volatility.
- A CoinShares advisor believed the current bull rally could push Bitcoin to its ATH.
- Pent-up demand for ETFs can contribute to more price increases.
Bulls just had a field day as Bitcoin (BTC) recorded a high of $64,000 on the 28th of February. On Bloomberg TV, Meltem Demirors, Chief Strategy Officer of CoinShares, described the bullish rally as:
“The most hated rally because we were not ready for it.”
The rally began in November 2023, defying expectations of a sell-off following the launch of a highly anticipated Bitcoin exchange-traded fund (ETF).
Demirors attributed the price increase to the significant demand created by the ETF, which is absorbing 10,000 BTC per day, compared to the daily mining rate of only 900 coins.
She predicted the next key target to be the all-time high (ATH) of $69,000, showcasing optimism for Bitcoin’s continued growth in 2024.
ETF market holds unexploited potential
The introduction of Bitcoin ETFs has opened new avenues for investors, with Demirors noting over $20 billion of inflows into these ETFs in the past two months alone.
Despite some outflows on the Grayscale side, the net inflows stood at a staggering $10 billion at press time.
The daily trading volume of Bitcoin ETFs has also reached new heights, with a record of around $2.5 billion traded in a single day, putting it on par with some of the largest U.S. equities.
However, the exec pointed out that many platforms have not yet offered these ETFs, sparking a significant campaign on crypto X (formerly Twitter).
The smaller average trade sizes observed hinted at a significant segment of potential investors yet to enter the market. This demand could be unleashed once accessibility improves.
Bitcoin’s volatility is not a concern anymore
Historically, Bitcoin’s volatility has been a point of contention for potential investors.
However, Demirors argued that this is becoming less of a concern relative to other asset classes, which have also experienced increased volatility.
“And at the end of the day, the allocations we’re talking about are not so large. Investors can allocate a couple of percentage points of their portfolio to Bitcoin, even with a bit of volatility, just given the supply-demand dynamics. Does that feel like a crazy idea?”
This shift, along with the continuous setting of higher highs and lows over the last decade, suggests a maturing market for Bitcoin.
What’s the next big thing in crypto?
Demirors spotlighted that the anticipation around the Ethereum ETF expected in May has injected a wave of enthusiasm into Ethereum (ETH). She suggested this is the next big thing on the institution allocation side.
Other than that, she highlighted,
“I’m very enthusiastic about what’s happening in the Solana ecosystem. I love my dogs, my frogs, and my memes.”
The exec noted that meme coins often signal widespread retail engagement once they surge, marking a key phase of market participation that has yet to fully materialize.
