Bitcoin hits annual high

Bitcoin reached a new annual high of $37.9 thousand last week, having only slightly adjusted in price over the weekend. Experts attribute the situation to the fact that BlackRock has filed an application for a spot ETF (exchange traded fund) Ethereum on NASDAQ. In the near future, Bitcoin may fall slightly, to $35 thousand, analysts expect, but by the end of the year it will rise to a local maximum of $42–45 thousand. However, they warn, there are no underlying assets behind cryptocurrencies and often a rise in their quotes means a rapid decline .

According to Coinmarketcap, Bitcoin last week, November 9, reached a yearly high of $37.97 thousand. On Sunday, November 12, the world’s largest cryptocurrency lost some value and was trading at $37 thousand, however, demonstrating a weekly growth of about 5 ,5%. Over the past seven days, ether has risen in price by almost 8%, exceeding $2 thousand.

Bitbanker CEO Sergey Gorshunov explained that the main factor that affects the price of leading cryptocurrencies was the registration of the new Ethereum ETF of the BlackRock trust. According to him, “there is speculation that the SEC will approve a Bitcoin spot ETF trust.” Bloomberg analysts assume the imminent launch of several spot Bitcoin ETFs.

This “further heats up the cryptocurrency market, which is very sensitive to rumors and is generally highly emotional,” says Cross Finance founder Alexander Mamasidikov.

Also, the rise in quotations of key cryptocurrencies is explained by “fundamental demand from corporate and institutional investors,” says independent financial analyst Andrei Barkhota. “First of all, we see the impact of the revision of the US rating forecast by Moody’s, the unfolding of an electoral cycle full of contradictions. Thus, an increase in capacity utilization for the production of defense products has a positive effect on gross output and the labor market, while the budgetary and financial part suffers, and contradictions with the PRC persist. As a result, the American currency, as well as Treasury bonds, no longer looks like risk-free financial instruments,” explains the expert.

The wave of demand for cryptocurrency is also due to the worsening armed conflict in the Middle East, adds Mr. Barhota. This, he said, is about escalation on the part of Iran and Lebanon in order to open several fronts against Israel at once.

Among other things, the upcoming halving (a planned reduction in newly issued coins) in the Bitcoin network, which will lead to a halving of the reward to miners for mined blocks, has a positive effect on the cryptocurrency exchange rate, clarifies Mr. Mamasidikov. A reduction in supply, even in the case of not growing but continuing demand, pushes the Bitcoin rate up, the expert explains.

At the same time, analysts are very cautious in forecasting the movement of cryptocurrency rates, even in the near future. Thus, Mr. Gorshunov allows for a correction of Bitcoin to the level of $35–35.5 thousand. Alexander Mamasidikov notes that, “according to rumors,” the approval of the Bitcoin ETF will occur before November 17, and one can expect that during this period the cryptocurrency will continue its growth. “If there is no approval, then in the second half of November you can see a correction and a return of Bitcoin to the range of $33-35 thousand. However, given that the next possible approval date is January 2024, then Bitcoin going below the $30 thousand mark is already unlikely.” , says Mr. Mamasidikov.

BitRiver financial analyst Vladislav Antonov believes that Bitcoin could reach a local maximum of $42-45 thousand before the end of the year. This will happen in the event of “positive news” on ETFs from the US Securities and Exchange Commission (SEC). The head of InDeFi Smart Bank, Sergei Mendeleev, even speaks about the likelihood of the Bitcoin rate rising above $100 thousand.

At the same time, Mr. Barhota emphasizes, investors should remember that there are no underlying assets behind cryptocurrencies: “The rise of their quotes also means an inevitable correction, which may be more rapid than seems likely.”

Ksenia Kulikova