Bitcoin has seen a remarkable rise since the last election, rising in value by more than 25% since November 5, briefly peaking at $88,000 before falling to $86,038 on Tuesday morning. At the same time, investors have pumped more than $1.3 billion into more than 12 exchange-traded funds (ETFs) that invest in digital assets.
Experts point out that there is an upward trend for Bitcoin, even if there are no results in favor of Trump. According to one specialized firm, capital may continue to flow into Bitcoin as a result of globally accommodative monetary conditions, noting that “Bitcoin acts as a liquidity sponge.
attracting capital in periods of monetary expansion when investors are looking for risky assets.”
Bitcoin vs Exchange Traded Funds (ETFs) in Bitcoin
Bitcoin was founded in 2009 with the aim of being an independent digital currency that users can own and trade without the need for intermediary from banks or major financial institutions. Initially, early adopters of cryptocurrencies created their own digital wallets.
accumulating bitcoin either by mining or through deals with online partners.
On the other hand, bitcoin exchanges provide another option for investors.
allowing them to store and trade their cryptocurrencies in a regulated environment. But the industry, which includes several startups, has been hit by some major scandals.
such as the one that led to the imprisonment of FTX founder Sam Bank man-Fried.
In January, bitcoin-focused exchange-traded funds (ETFs) entered the market after years of regulatory deferrals. These funds, which own the same bitcoin, are traded all day on exchanges, making them a convenient option for investors who want to be exposed to bitcoin without having to deal with technical and privacy issues related to live trading.
Cryptocurrencies exceed $3.12 trillion as Bitcoin rises
The total market capitalization of cryptocurrencies has risen beyond its previous highs, reaching nearly $3.12 trillion, a significant increase from the previous peak of $3.07 trillion recorded in November 2021. This rise is largely due to a 25% increase in bitcoin prices, which now hovers above $86,000. Ether is not much behind, rising 33% to nearly $3,260. Evolving market dynamics reflect a growing acceptance of digital assets as viable investment tools.
especially after the recent Republican electoral sweep that reinstated Donald Trump as a key political figure linked to cryptocurrencies.
Institutional Attention Drives Cryptocurrency Valuation
Recent data shows a significant rise in institutional investment as bitcoin exchange-traded funds have reported inflows of $3.1 billion since November 6. This influx is crucial, and represents a major shift in how large investors perceive the cryptocurrency landscape. Calchef noted that Bitcoin now makes up more than 50% of the total cryptocurrency market, an increase from 40% during the last peak in 2021. This trend points not only to a recovery but a shift in market dynamics.
with Bitcoin at the forefront, in contrast to previous bull markets that were driven by altcoins.
Market sentiment plays a pivotal role in the valuation of cryptocurrencies. The recent post-election optimism in the US has spurred a wave of interest from retail and institutional investors.
as expressed by Tom Dunlevy.
who noted that “what we have just seen is the awakening of the traditional finance market all at once.” The combination of renewed political leadership and positive market sentiment has fostered an environment conducive to large-scale price hikes.
Bitcoin Record High: Does It Signal a Correction Nearby?
The price of Bitcoin (BTC) hit a new record high on Tuesday, reaching $89,900, before retreating slightly to around $86,000. The cryptocurrency has seen a remarkable increase of 30% since November 5.
indicating a spike in interest and investment in the market. However, technical indicators suggest that this rise may be exaggerated, opening the door to the possibility of an imminent price correction.
Data from platforms like Sentiment suggests that some bitcoin holders are starting to take profits.
at a time when markets are in a state of euphoria, similar to the atmosphere that prevailed last March when the price of Bitcoin reached unprecedented levels. At the same time, leverage continues on platforms such as Binance and Bitmex High levels are recorded.
as traders seek to capitalize on further price rises, boosting the prospects of a correction in the near future.
Despite this, institutional flows continue, suggesting that large investors continue to collect bitcoin.
even as profit-taking operations are carried out by some coin holders. According to data from Coin glass ETF, Bitcoin ETFs in the U.S. recorded an inflow of $1.12 billion on Monday.
with funds such as BlackRock IBIT. $763.60 million in total inflows.
Despite warnings of risks associated with “leverage laundering”. Crypto Quant data shows that leverage on Bitcoin has reached its highest level this year.
reflecting increasing risks and volatility in the market.
Despite these indicators, experts point out that market fundamentals remain strong, and that any short-term corrections could be seen as a healthy opportunity to calm the market and absorb some leverage. With the current cycle indicators stabilizing.
price corrections may remain a good opportunity for investors who are closely monitoring market developments.
