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Bitcoin is testing a new resistance of $70,000 amid speculation that it could go as high as $100,000 by the end of this year, that is, 2024. A decline, if any, is inevitable; however, analysts have proposed a theory that Bitcoin will never fall below $50,000 unless a significant event occurs in the cryptocurrency market or macroeconomy. Demand and the adoption of potential yield-enhancing strategies are both driving factors behind the price increase.
Bitcoin’s Recent Rally: Adoption or Speculation?
The recent rally of BTC is because of its adoption by investors. Fund managers like BlackRock and Fidelity are standing on their grounds to pitch Spot Bitcoin ETF to their customers. Plus, MicroStrategy is optimistic about its plan to continue accumulating the token. If anything, the Bitcoin ETF has paved the way for investors to gain indirect exposure to BTC since January 10, 2024. Thereby, fueling the demand for the token.
Michael Novogratz, a crypto bull and Galaxy Digital CEO, was among the first to say that the new floor for Bitcoin is $50,000, or $55,000 in the best possible scenarios. Michael said that the assumption is based on the rising adoption and growing demand for Bitcoin at present. The Chief Executive Officer of Galaxy Digital was interacting with the media when he put forth this statement.
He also believes that the people of the US like Bitcoin and other digital assets. Further statements by him mention that there has been a billion-dollar inflow in the ETF alone on a single night, with BlackRock’s IBIT contributing most of it.
The fueling of the Bitcoin price is simultaneously attributed to policies that the Federal Reserve has crafted over time. For instance, inflation was at its peak, comparatively. Many people looked for a way to make the most of it by seeking an alternative. What restricted the movement was liquidity due to interest rates. Nevertheless, it was interesting to know that the crypto sphere was able to beat better profits.
Gauging Bitcoin’s Adoption: Metrics and Challenges
The 24-hour volume of Bitcoin is down by 30.21% at the time of writing this article. It stands at $47,211,539,177. Volume has fluctuated throughout March 2024, as the peak was seen on March 5, 2024, when the value was $68,743.49, whereas while writing this article, it holds a $73,281.07 value.
However, regulatory uncertainty prevails across the globe. The US SEC has granted its approval to the Bitcoin ETF, but the same is uncertain about other crypto ETFs. This is only in the US, with the rest of the world still processing the legal status of cryptocurrencies. They have either been met with heavy taxes or have been categorized as illegal.
Other aspects that challenge Bitcoin are environmental concerns and scalability issues. Merchant adoption is still feasible; the last report highlighted that over 15,000 businesses had updated their payment methods to include Bitcoin.
Looking Ahead: Long-term Prospects for Bitcoin
Altcoins are gaining momentum, for they are valued far less as compared to Bitcoin. ETH, for one, is listed at ~$3,900 at the time of writing this article. Others are SOL and $LTC, to mention a few. They are priced at $168.44 and $95.59, respectively. Bitcoin has a bullish future, except it could be met with restrictions if altcoins gain more traction.
Needless to say, the future of Bitcoin and other cryptos is volatile; recommendations are floating high for traders to exercise every possible caution before investing in the crypto sphere.
Regional regulations will hold a key to the rise of the dominant token.
Conclusion
Several factors are considered when determining the future of a crypto token. One or multiple can begin draining the value at any moment. It is ideal to conduct research and dedicate only that portion of funds that can be risked with high volatility. Bitcoin may test the floor of $50,000, but chances also are that it can go further below if dramatic turns appear.