Bitcoin is showing a noticeable rise since the beginning of 2023, while at the same time there is a crisis in the US banking system.
On the other hand, the Fed seems to be coming to the end of its policy of raising interest rates. What does all this mean for the course of Bitcoin in the immediate and long-term future?
The cryptocurrency market analysis firm, CryptoQuant, was interviewed by CryptoPotato during Consensus 2023 and there they gave their own conclusions about the price of Bitcoin, including where it stands in its current four-year cycle, its correlation with gold and its role during the current US banking crisis.
Optimistic future for Bitcoin
When asked whether Bitcoin has returned to a Bull Market, CryptoQuant’s Head of BD & Strategy, Benjamin Brannan, said that it seems to have exited the bear market.
Although he made it clear that corrections in the Bitcoin price will always be there, he revealed that he received interest from institutional clients to invest in both BTC and other cryptocurrencies in the third and fourth quarters of 2023.
“These come from conversations I’ve had primarily with people who handle institutional funds and people who raise key resources who have received such information from institutions and high net worth individuals,” Brannan said.
Brannan added that institutions are waiting until the second half of the year for confirmation that Bitcoin has come out of the bear market, which so far “seems to be the case.”
Bitcoin and gold
Bitcoin was trading at $16,500 at the start of the year and quickly rose to $27,000 in response to the US banking crisis, which led banks such as Silicon Valley Bank, Silvergate, First Republic and other banking institutions to fail.
Moreover, this event coincided with a decline in Bitcoin’s correlation with tech stocks (Nasdaq) and an increasing correlation with gold.
This phenomenon is particularly evident in Bitcoin’s newfound resilience to the Federal Reserve’s interest rate hikes, which hit stocks and cryptocurrencies over the past year.
Branaan argued that the shift to Bitcoin was a sign that the market, at least for now, sees it as a safe haven. In fact, in the long term, he predicted that it will behave like a mix of stocks and gold.
Cryptoquant’s chief marketing officer, Ho Chan Chung, expressed the view that Bitcoin is seen as a commodity that performs well when the system does not work properly, adding that, unlike other cryptocurrencies, regulators in the United States agree that it is a commodity.
The four-year market cycle
Bitcoin is known to move cyclically between bull and bear markets every four years, based on the timing of new currency issuance, which reduces its inflation rate.
While the general pattern is predictable, pinpointing the exact timing of record highs and each cryptocurrency market bottom can be a tricky business.
When asked about price predictions for the near future, both Brannan and Chung agreed that Bitcoin will likely not fall back to its $16,000 lows:
“Unless there are black swan events like Russia detonating a nuclear weapon in Ukraine or Binance blowing up… then we should be pretty stable in terms of hitting the price bottom,” Chung said.
Furthermore, Chung added that Bitcoin may even surpass its all-time high by Q2 2024, just about the time the next Halving will take place.
In the long term, Brannan pointed out that Bitcoin could realistically reach one million dollars by the year 2030. Even the tighter regulatory situation in the United States could serve to benefit the leading digital asset, always in his view.
“I think Bitcoin is difficult to regulate, compared to ‘crypto’. I think it can benefit,” he added.
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