For the fourth month in a row, Bitcoin is set to see gains after rising as much as 2.5% over the weekend, trading at roughly $29,700, reports an article in Bloomberg. It’s the cryptocurrency’s longest winning streak since it had a six-month advance that ended with March 2021. Other smaller cryptocurrency also gained in April, including Ether, Binance Coin, and Cardano.
In the past, a 4-month winning stretch for Bitcoin led to an average surge of 260% over the following 12 months, according to Bloomberg data. That would put Bitcoin at a record high of $105,000 from about $30,000 where its clawed its way up to this year after getting battered last year. The cryptocurrency has drawn gains from expectations on a loosening from the Fed, as well as a reduction—or halving—in the supply of new tokens that is planned for 2024. Crypto is “a lightning rod for liquidity,” Christopher Forbes of CMC Invest Singapore told Bloomberg Television, adding that it “will continue to trade well” as liquidity pours back into the market.
Bitcoin has also been bolstered by the crisis in the banking industry, seen as an alternative and a “decentralized, trestles and scarce digital asset,” wrote Geoff Kendrick of Standard Chartered in a recent note. The cryptocurrency also has the potential to claim some of gold’s place as an asset of value as the world becomes more digitized. Indeed, if Bitcoin reached 25% of gold’s market capitalization, that would be its price in the neighborhood of $160,000, and Bloomberg estimates that if 1% of the global bond market’s value shifted toward Bitcoin, it would push the price even higher, to $185,000. Of course, whether that trajectory will actually happen has yet to be seen, but even just the analysis indicates that crypto has come back into favor after a dismal 2022 that culminated in the FTX exchange collapse, the article contends.
Still, the world of cryptocurrency comes with an array of risks, from the crackdown in the sector by U.S. regulators to traders walking back their expectations of the Fed loosening its policies sooner rather than later. Given all the uncertainty, the outlook for Bitcoin remains murky, and its price is still $40,000 below its record-high of nearly $69,000 in 2021. And while the crypto market is as cyclical as other assets, “now the crypto market has multiple drivers, making the narratives more complex while opening up the market to new investing cohorts” wrote Noelle Acheson in the “Crypto Is Macro Now” newsletter, which Bloomberg quotes in the article.