Nasdaq Composite Index has surged continuously for seven days, setting a historical new high. The Dow Jones Industrial Average and the S&P 500 have also hit similar highs, thanks to chipmaker Nvidia and the investment frenzy around artificial intelligence. However, Bitcoin has failed to keep up. Despite predictions from market observers that the cryptocurrency may soar to $200,000 next year, it has remained stable at around $65,000 for the past week. There are four factors that are blocking this top cryptocurrency. Following the strong start at the beginning of the year, Bitcoin is only catching its breath. Nasdaq may have increased by 18% year-to-date, but Bitcoin has surged by 53%, McCarthy points out. This is not just because Bitcoin tends to be more volatile, but they are “moving on different factors.” The next driver for Bitcoin will be the latest halving and the long-term impact of ETF demand. The fourth halving that occurred in mid-April will halve the amount of Bitcoin miners receive for maintaining the blockchain. Due to the reduced creation of Bitcoin, market participants expect that the supply shock will drive prices up. However, the impact of the halving often takes several months to manifest and is mostly visible when Bitcoin demand is rising. ETF demand in the United States may have a significant impact here, as more advisors and companies are expected to onboard new investors in the coming months. CCData research analyst Jacob Joseph agrees, suggesting that there is usually a period of trading doldrums for several months after the quadrennial event. In particular, the market was overheated in the months before the halving. The central exchange recorded a new historical high in March, while open interest in speculation “reached unprecedented levels.” Open interest is an indicator of the total number of outstanding futures contracts. High open interest is often due to a speculative frenzy. In this sense, the market needs a current cooling period or price consolidation before seeing the typical rapid price expansion of Bitcoin and other digital assets. Last week saw the most severe outflow of assets from spot Bitcoin exchange-traded funds (ETFs) since March, amounting to $620 million. The short-term capital outflow of spot Bitcoin ETFs has also fueled negative sentiment in the market, affecting the price trend of assets. However, the imminent launch of Ethereum ETFs, combined with recent positive macroeconomic data, suggests that Bitcoin and major cryptocurrencies are likely to reverse the trend and aim for a new cyclical high soon. Since it collapsed in 2014 following a hacker attack, Mt. Gox, once the world’s largest cryptocurrency exchange, has been hanging over the industry. The reason? About $9.2 billion worth of Bitcoin has been detained in the bankruptcy, waiting to be repaid to creditors. It now appears that these 142,000 Bitcoins may enter the market at any time before the final repayment deadline of Mt. Gox on October 31. A large-scale redemption of Bitcoins is unlikely to occur,” David Duong, research director at cryptocurrency exchange Coinbase, recently told DL News. “But concerns surrounding these repayments may still limit liquidity, as market participants may avoid deploying new capital in uncertainty.” Bitcoin miners are also putting pressure on the price of this top cryptocurrency. Although the halving limits the amount of new Bitcoins that mining companies can create and sell, most of these companies still hold large reserves of Bitcoin. According to data from analysis company CryptoQuant, the industry has sold about $300 million worth of Bitcoin reserves since the beginning of the year. The largest publicly traded miner in the United States, Marathon Digital, sold over $92 million in June alone, about 8% of its $1 billion reserve.
