Multiple data indicate that Bitcoin is attracting more funds to enter the market at an accelerated pace, and there is a bullish consensus on its future market trends. At the same time, Bitcoin and meme sectors are leading the market trends, highlighting the risk preferences and risk tolerance of different investors.
By Nancy, PANews
Bitcoin broke through $68,000 today, surpassing silver to become the world's eighth largest asset. In the strong market, multiple data indicate that Bitcoin is attracting more funds to enter the market at an accelerated pace, and there is a bullish consensus on its future market trends. At the same time, Bitcoin and meme sectors are leading the market trends, highlighting the risk preferences and risk tolerance of different investors.
Bitcoin is back in the spotlight, with funds pouring in from all sides
As Bitcoin enters an accelerated upward phase, it has once again made it to the top of Weibo's hot search list multiple times. Many investors have also expressed that many friends and classmates outside the circle have inquired about how to buy Bitcoin, and even college students' relatives have participated in speculation. This also shows the FOMO sentiment brought about by Bitcoin's strong market trends.
With Bitcoin approaching historical highs, CoinGecko data shows that as of March 5th, the total market value of cryptocurrencies has exceeded $2.6 trillion, with a 24-hour increase of 4.9% and a trading volume of over $244.45 billion in 24 hours.
The surge in cryptocurrency market value is accompanied by a continuous influx of funds. Glassnode data shows that approximately $48.5 billion has flowed into the cryptocurrency market in the past 30 days, marking the highest inflow since October 2021. Among them, the fund size of multiple Bitcoin investment products has also reached new highs recently.
For example, according to data released by Bloomberg analyst Eric Balchunas, as of the close of the US stock market on Monday, the daily trading volume of the US Bitcoin spot ETF exceeded $5.5 billion, the second highest in history. The asset management scale of the Bitwise Bitcoin ETF surpassed $10 billion in just seven weeks after its listing, exceeding the largest silver ETF. Additionally, according to the latest weekly report from CoinShares, digital asset investment products recorded the second highest weekly inflow on record last week, totaling $1.84 billion. According to the latest data from ByteTree, the amount of Bitcoin held by global Bitcoin ETP products once exceeded 1 million, setting a new record.
At the same time as the surge in funds, many large institutions and sovereign countries are holding or planning to expand their Bitcoin investment portfolios. For example, BlackRock plans to add exposure to Bitcoin ETFs in its $36.5 billion Strategic Income Opportunities Fund; Merrill Lynch and Bank of America under the US Bank provide Bitcoin ETF products to clients; MicroStrategy, holding about 19,300 Bitcoins, plans to privately issue $600 million in convertible senior notes after a $7 billion unrealized gain, and will use the net proceeds to purchase Bitcoin; El Salvador, holding about 23,800 Bitcoins, still stated that it will not sell even after a 50% unrealized gain.
Rise of MEME tokens triggers FOMO, Bitcoin NFT heat surpasses Ethereum NFT
Looking at the current rising cryptocurrency sectors, investors with different risk preferences choose different investment targets.
Unlike institutions and whales with large fund sizes, most ordinary retail investors seem to be "missing out" on Bitcoin and are choosing more room for profit with meme coins. Therefore, it can also be seen that the discussion about Bitcoin in various investment groups is not high, even though Bitcoin's returns in the past month have been close to 60%.
Recently, the strong rise of meme coins has stolen the limelight. CoinGecko data shows that as of March 5th, the market value of the meme sector has exceeded $765.6 billion, with a 34.4% increase in the past 24 hours. Popular meme coins such as PEPE, FLOKI, SHIB, and BONK have recently seen gains several times over. Compared to the expensive Bitcoin, these meme tokens are not only cheap in price but also have greater profit potential, making them the "darlings" of many retail investors, especially those who are new to investing.
As Bitcoin's price continues to soar, its booming NFT ecosystem also highlights the market's preference for such investment targets. Over the past few months, the market performance of most Ethereum NFTs has been quite poor, with some investors even declaring "Ethereum NFT is dead," while Bitcoin NFT narratives are gaining ground in the market. According to the latest data from Cryptoslam, the trading volume of Bitcoin NFTs has exceeded $180 million in the past 7 days, surpassing the $178 million trading volume of Ethereum NFTs during the same period, ranking first. In addition, according to Dune data, as of March 5th, the cumulative fee income of Bitcoin NFT protocol Ordinals' inscriptions has exceeded 6,267 BTC, worth about $4.08 billion.
In addition, influenced by the upcoming Ethereum upgrade, the Ethereum-based tokens have seen a small rally, and Layer2 and staking have become the focus of the current market participation. L2BEAT data shows that as of March 5th, the total locked value of Ethereum Layer2 networks has reached $34.48 billion, an increase of 64.7% since the beginning of the year. The staking protocol has also attracted attention due to the upcoming upgrade, and with the expectation of enriching income forms and airdrops, the demand for staking is growing. Taking EigenLayer data as an example, DefiLlama data shows that EigenLayer's TVL has exceeded $10.6 billion, with a monthly growth rate of 194%.
Whether it is Bitcoin or other tokens like meme coins, they are seen as "value coins" by different investor groups.
Post-halving facing short-term correction? Long-term value of Bitcoin is seen as bullish
Historically, the Bitcoin halving event, which occurs every four years, is also considered an important driver for accelerating Bitcoin's rise. According to BTC.com, the current block height is about 45 days away from the Bitcoin halving, which is expected to occur on April 20, 2024, when the block reward will decrease from 6.25 BTC to 3.125 BTC.
However, once the positive news is released, many institutions have made pessimistic predictions about the short-term market trends after the halving. Daniel Yan, co-founder of Matrixport, predicts that due to macroeconomic factors and the upcoming Bitcoin halving event, the market sentiment is overheated, and it is expected to experience a healthy correction of about 15% by the end of April. Meanwhile, analysts at JPMorgan also predict that due to the reduction in miner rewards and rising production costs after the Bitcoin halving, the price of Bitcoin may fall to $42,000. At the same time, the halving event will further concentrate the Bitcoin industry, allowing larger miners to survive.
However, many people are also "bullish" on the long-term market trends of Bitcoin. For example, Anthony Scaramucci, founder of SkyBridge Capital, predicts that based on historical data, Bitcoin may reach a peak of $170,000 after the halving in April. In the long term, the price of Bitcoin may reach $400,000 and its market value may increase tenfold, approaching half of the market value of gold.
Michael Saylor, founder of MicroStrategy, recently stated, "I believe we are in the Bitcoin gold rush era. By 2035, 99% of Bitcoin will have been mined, and 2035 will mark the beginning of the 'growth phase.' Although currently, Bitcoin spot ETFs only provide a 'distribution channel' for 10%-20% of interested parties, once banks and institutions start to facilitate Bitcoin trading, this proportion will rise to 100%, and almost all banks will eventually be pressured to custody Bitcoin. One day, Bitcoin will surpass gold, and its trading volume will exceed that of the S&P 500 ETF."
Matrixport, a cryptocurrency financial services company under Wu Jihan, stated that the halving event has never been the peak of the cycle, and the rebound of Bitcoin may have just begun. The Bitcoin bull market is still ongoing, with uneven demand from institutions and awakening demand from retail investors. The imbalance between supply and demand continues to favor the rise in the price of Bitcoin. In addition, US presidential candidate Robert Kennedy stated that Bitcoin is a derivative product of central bank "printing machines," a window to resist inflation, and a key to trade freedom.
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