With the start of the school year looming, some wonder about the relevance of investing in Bitcoin or the cryptocurrency market. We have compiled several parameters for you that could justify taking the plunge.
1 – SEC accusations appear to be losing credibility
Engaged in a lawsuit against Ripple but also against the Binance and Coinbase platforms, the SEC seems to be gradually losing ground. Earlier this week, the giant Grayscale won a lawsuit against the American financial watchdog. Beyond the defeat of Gentler and his henchmen, the tone of justice also greatly marked followers of crypto news. Indeed, the judges described the SEC's refusal of the proposal as arbitrary and capricious because it did not justify its refusal with facts. The annoyance of justice is more palpable than ever.
In a press release, Grayscale welcomed this victory, highlighting "the monumental progress for American investors, the Bitcoin ecosystem, and all those who have advocated for exposure to Bitcoin through the additional protections of the ETF envelope."
Following this announcement, Bitcoin experienced a day of strong growth: + 5%. An increase which, for once, has taken with it all crypto projects. But beyond the announcement effect, and as Grayscale points out, this decision could serve as jurisprudence for the entire market.
2 – Less than 8 months before the next halving
We know the Bitcoin halving is traditionally synonymous with an increase in the price of Bitcoin. For a reason ultimately well known to economic players: the principle of supply and demand. Indeed, the Bitcoin protocol works so that the only new Bitcoin issued is through mining. When a transaction block is validated, miners receive a BTC reward.
Halving consists of dividing this reward by two. Limiting, de facto, the issuance of new Bitcoin. This phenomenon systematically suggests a reduction in selling pressure around the mother of cryptocurrencies since inflation around Bitcoin is decreasing. Historically, halving has always been a source of growth for Bitcoin. With less than 8 months left, the price does not reflect this major upcoming element yet. It is also according to this main argument of halving that CZ, the CEO of the Binance platform, predicted a bull run for 2025
3 – Bitcoin remains far from its annual high
If Bitcoin had started the year with a sharp rise from $16,000, in recent days, we have been in a bearish dynamic despite the signal sent by Grayscale's victory against the SEC. As we write these lines, Bitcoin is trading on the edge of $26,000, almost 20% below its highest level of the year, close to $32,000. If there is nothing to confirm that the mother of cryptocurrencies will eventually return to its annual high, it is clear that the margin exists.
The following graph, taken from the Coinmarketcap platform, illustrates the evolution of the Bitcoin price since the start of the year. After a long-range around $30,000, the asset plunged. The increase in recent days is to be credited to the legal decision rendered against the SEC. For many analysts, a retest of psychological resistance at $30,000 would only be a matter of days.
Bitcoin even displays a discount of more than 50 compared to its all-time high. As a reminder, at its highest during the last bull run, the crypto asset traded close to the $70,000 mark. Some estimates predict a six-figure Bitcoin during the next bull run. Perhaps it is the right time to position yourself?
4 – A way to diversify your asset portfolio
If you already invest in other assets, such as stocks or bonds, buying Bitcoin may be a wise choice to diversify your investments. Although many sources have established a correlation between stock prices and cryptocurrency prices, the relationship seems not linear.
In recent months, the relationship between Bitcoin, Ethereum, and the S&P 500 has tended more towards decorrelation. Or rather to a reduction in the correlation. Investing in Bitcoin or other altcoins like Ethereum or Solana could prove to be a good way to have differentiated assets.
5 – Nearly 93% of BTC already issued
Born on the ruins of the subprime crisis and distrust of the traditional banking system, Bitcoin is built around an anti-inflationary system. The protocol is attractive if new tokens are issued with each mined block because it controls its issuance. And on this point, the rules are extremely clear: 21 million Bitcoin and not one more.
As of this writing, 19.47 million Bitcoins are already in circulation. Which represents 92.73% of the total supply. By betting on Bitcoin, you have the certainty of a controlled emission.
