Bitcoin Tops 45K Amid the Sec’s Pending Verdict on Etfs’ Faith

Bitcoin has started the year on an expectedly positive note, having crossed a milestone yet to be achieved since April 2020. Global cryptocurrency exchanges such as Binance have registered heightened orders for purchasing the primary token, exchanging USDT in BTC for storage reasons and in expectation of the 50K threshold’s breach. The long anticipation for a decision from the SEC on whether spot BTC ETFs will become legal and operable within the US as they have done in Canada and other nations has driven the asset’s price to over $45,000 and its market cap to over $886B. Consequently, the circulating supply of the token stands at a little over 19.5M, representing a figure that could be reduced once the halving reduces the rewards for miners and, with it, the influx of new BTC coins.

One day after Bitcoin topped $45,000, 21 months after its first such achievement, all the news in the media hints at one possible scenario: the asset’s resurgence to its golden days of 2020. Whether such an optimistic plot stands ground to happen, the asset will surpass its ATH, or the spark is closely going out depends a lot on the latest events and future expectations in the crypto world.

BTC’s supply crunch has historically rewarded patient investors, and chances are it will follow the trend

Bitcoin’s protocol was initially designed with a built-in mechanism to bite into miners’ rewards approximately every four years. However, the date is not set in stone, and the timeframe allows for some days as an error margin. As found in the asset’s white paper developed by Satoshi Nakamoto, Bitcoin’s said creator, the decrease occurs when around 210,000 blocks have been mined, whereas the calculated date is more or less than 1460 days. This mechanism aims at keeping the supply under control and 21 million bitcoins, the latter representing a figure expected to occur around 2140. However, the exact number cannot be attained.

These halving events play a vital role in the asset’s economic model, securing its scarcity and inflation rate by reducing the rate at which new coins are developed. This feature’s intent aligns with the creators’ vision of producing a deflationary and decentralized type of digital money, gradually decreasing the supply and contributing to the asset’s future high value if demand keeps persisting or grows. In parallel to gold, Bitcoin also fosters the perception of long-term worth, which is why the long-term holding strategy is often the most gainful.

Here’s a chronicle of the asset’s performances after the mentioned halvings

Historically, Bitcoin has registered gains months after past halvings. The first halving ever, occurring four years after the asset broke into the market and started the craze that followed, has reduced the asset mining reward from 50BTC to 25BTC. The reward reduction potentially contributed to the price’s upswing from $12.35 to $964 registered throughout the year.

The second halving in July of 2016 decreased the block reward to 12.5BTC and saw the price rise to $2500 from $663 all over the following year. As Bitcoin has already accustomed investors, the upcoming halving coincided with price growth from an estimated $8,500 before the halving date to an astronomically $64,000, making plenty of investors affluent and having BTC owners grow wealth in a relatively short period. The gains were registered within several months after the halving, having been accompanied by other favorable events in the financial sphere. A tendency of overbuying the asset contributed to the memorable performance of the primary cryptocurrency in existence.

This year, large investors have already disclosed an inclination toward stocking on BTC, where the upcoming halving of the block reward to 3.125 BTC could be counted as a motivating factor. Reasonably, the SEC’s pending conclusion on the destiny of spot BTC ETFs (Bitcoin exchange-traded funds) also contributes as a stimulator, as the asset is going to enter a new era in the United States.

BTC gains value as the likelihood of ETFs’ approval rises

According to Reuters and other press reports, the Securities and Exchange Commission (SEC), occupied with securities market regulation, has yet to process all the pending applications for the first Bitcoin ETFs in the country. As news from reputable sources suggests, a decision could not be completed until the 10th of the first month of 2024, representing another postponement of the final verdict amid the numerous previous delays already witnessed. On the other hand, and in the most optimistic scenario, a decision could be taken within the following hours, as the 10th of this month represents the latest date to come up with a conclusion. The SEC’s denial of spot BTC ETF’s creation means these investment vehicles won’t possibly be created and put at investors’ disposal.

Bitcoin has started the week hovering below the $45.700 price, regaining investors’ trust as it inches toward the $5K. Similarly, Solana has followed in its footsteps and registered a 7% rally, securing its spot as a top and preferred cryptocurrency with optimistic prospects for the time being.

As evident, Bitcoin has broken into 2024 on a positive trajectory, instilling confidence among existing investors and prospective BTC owners regarding its potential for a profitable investment outcome. To date, 14 applications from Wall Street entities are awaiting a response, including those from Hashdex, Global X, Grayscale, Wisdomtree, BlackRock, and Fidelity. These issuers have complied with the terms and conditions and adjusted their requirements in conformity with the SEC’s pre-established instructions.

As reports show, a potential $50K is on the horizon for BTC. Investors believe in such a favorable scenario as analysis of past performance and prices suggest such a price hike.

Summing it up

As voices come out in spot BTC ETF’s favor, the approval likelihood this month rises and fuels optimism within the market. These favorable scenarios and high expectations make the newspaper headlines. They are suggested by analysis reports, which all point to an optimistic future for the asset amidst the SEC’s postponed decision and other forthcoming events, like the mining reward reduction.

The upcoming days are critical for the asset’s performance, and all eyes are on the SEC’s moves. As you can see, there’s anything but peace in the crypto space, and the prospects for a bright future for the primary asset and other participants in the crypto space are higher than ever.

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