Four Reasons Why Bitcoin Could Experience A Bull Run The Next Months
There are four reasons why Bitcoin (BTC) could surge in the near future. As the market expands and companies invest in the space, the most popular digital currency could eventually surge in the next few months. In this article, we will provide you with some of the reasons we consider would help Bitcoin grow.
Bakkt launching physically-settled Bitcoin futures
Bakkt, a company created by the Intercontinental Exchange (ICE) has received approval by the U.S. Commodity Futures Trading Commission (CFTC) to bring institutional infrastructure to digital assets. The goal is to start working on September 23 offering custody and physically-delivered daily and monthly Bitcoin futures contracts in partnership with ICE Futures U.S. and ICE Clear U.S.
This would allow many larger companies and investors to have access to the cryptocurrency market knowing that the firm behind these services is recognized and is regulated. Until now, the cryptocurrency market has focused only on retail investors rather than larger companies and institutions.
Institutional Money Entering The Space
According to Brian Armstrong, the CEO of Coinbase, one of the largest cryptocurrency exchanges and platforms in the industry, said that they are experiencing $200-$400 million a week in new crypto deposits from institutional customers.
Whether institutions were going to adopt crypto or not was an open question about 12 months ago. I think it’s safe to say we now know the answer. We’re seeing $200-400M a week in new crypto deposits come in from institutional customers.
— Brian Armstrong (@brian_armstrong) August 16, 2019
Although he didn’t explain whether 100% of the funds are being invested in Bitcoin, this is a massive amount of money for the cryptocurrency market. For example, around $130 million in BTC are mined each week. Some of the most profitable miners do not sell all the BTC they earn, meaning the selling pressure on the market is even lower than $130 million per week just from miners.
It seems there is a growing demand for Bitcoin that is expected to help the digital currency grow in the future.
In just 274 days, Bitcoin is going to be experiencing a block reward halving. That means that miners are going to be receiving half of the current amount of BTC they receive for processing transactions. Currently, the reward is 12.5 BTC per block, but this number is expected to be reduced to 6.25 BTC around May 17, 2020. That’s less than a year from now.
Previous halving events show that Bitcoin experiences a price increase before and after the reward reduction for miners. This is also very bullish for the digital asset if we consider the aforementioned points.
When in doubt, zoom out pic.twitter.com/7ILPQrOguu
Although there is nothing confirmed, the approval of a Bitcoin ETF – this would be the first crypto ETF approved – would have a bullish effect on the price of the largest digital currency. Final decisions on two Bitcoin ETFs presented by Bitwise and VanEck/SolidX are expected by October 13 and October 18.
Matt Hougan, Bitwise global head of research, commented about an ETF approval:
“A little more than a year ago, we didn’t have futures. A year ago we didn’t have nearly as many firms making markets. A few months ago, you didn’t have folks like Fidelity announced in the space. It’s evolving really, really quickly.”
If the cryptocurrency market takes into account all these factors and pays close attention to the charts, we may be close to a new bull run in Bitcoin that would help the whole crypto market continue the upward trend started earlier this year.