admin
Bitcoin
and other cryptocurrencies were rising Wednesday, nearing recent highs amid a bevy of positive factors buoying digital assets. With Bitcoin supply at historically tight levels, gains have the potential to be supercharged.
The price of Bitcoin has advanced 2% over the past 24 hours to near $35,400, closing in on last week’s peak near $36,000—which marked the token’s highest level since May 2022, when cryptos tumbled into a prolonged and brutal bear market. The largest digital asset has rallied some 30% in a matter of weeks, snapping out of a multi-month period of low volatility and subdued trading amid calls of a new bull market.
Bitcoin has outperformed the
Dow Jones Industrial Average
and
S&P 500
on the back of mostly crypto-native catalysts, though hopes that the Federal Reserve has finished raising interest rates recently have been supportive of all risk-sensitive assets.
In particular, crypto bulls remain hopeful that regulators will soon approve a spot Bitcoin exchange-traded fund (ETF), which would be expected to usher in a new wave of investor interest. Geopolitical risks from conflict in the Middle East also has sparked another round of calls for Bitcoin as “digital gold,” with evidence that traders have moved into crypto as a haven play.
With analysts seeing longer-term support for Bitcoin in focus is a shift in tokens to long-term holders less willing to part with their digital assets, which could set the crypto market up for tight supply at a time when prices have momentum to keep rising. Adding to tight supply dynamics are expectations of Bitcoin’s so-called halving next year, which will reduce the issuance of tokens going forward.
The supply of Bitcoins among long-term holders is just shy of an all-time high, according to analysts at crypto market research group Glassnode, with short-term holder supply effectively at all-time lows.
“This insightful dynamic demonstrates a growing tightness within the Bitcoin supply, as existing holders become increasingly unwilling to part with their holdings,” analysts at Glassnode wrote in a recent note. “The Bitcoin supply is historically tight with many supply metrics describing ‘coin inactivity’ reaching multi-year, and even all-time highs. This suggests that the Bitcoin supply is extremely tightly held, which is impressive given the strong price performance year-to-date.”
“With the halving expected in April, and positive momentum around a spot ETF in the U.S., the coming months are shaping up to be exciting ones for Bitcoin investors.” they added.
Beyond Bitcoin,
Ether
—the second-largest crypto—was less than 1% higher at $1,880. Smaller tokens or altcoins continued to outperform, with
Cardano
climbing 4% and
Polygon
popping 9%. Memecoins were more muted, with
Dogecoin
up 2% and
Shiba Inu
advancing 1%.
Write to Jack Denton at [email protected]
Read the full article here
