Bitcoin Marches Towards $70k: Bullish And Bearish Arguments Explained (2024)

FAQs

What is the bullish argument for Bitcoin? ›

The Bull Case for Bitcoin

Bitcoin is gaining acceptance from both retail and institutional investors. Major corporations and financial entities, including Tesla and PayPal, are incorporating Bitcoin into their operations, signaling a strengthening confidence in its long-term viability.

The recent surge in cryptocurrency prices, coupled with positive developments such as the approval of Bitcoin Spot Exchange Traded Funds (ETFs) by regulatory authorities, has fueled expectations for further gains. Additionally, anticipation is building around the upcoming Bitcoin Halving event scheduled for April 2024.

Different currencies have different appeals, but the popularity of cryptocurrencies largely stems from their decentralized nature: They can be transferred relatively quickly and anonymously, even across borders, without the need for a bank that could block the transaction or charge a fee.

Bitcoin Back on a Bullish Path? ETFs in Focus. Look at Bitcoin ETFs as long-term prospects of Bitcoin remain optimistic despite recent volatility, with interest rate cuts by the Fed and broader acceptance of the digital currency fuelling the optimism.

Investors, after being buoyed by their Bitcoin profits, may venture into higher-risk cryptocurrencies in search of greater returns. This dynamic was observable during the 2021-2022 bull run, a period where Bitcoin's gains were swiftly followed by a significant uptick in altcoin valuations (Exhibit 3).

As it grew in popularity, Bitcoin became cumbersome, slow, and expensive to use. It takes about 10 minutes to validate most transactions using the cryptocurrency and the transaction fee has been at a median of about $20 this year. Bitcoin's unstable value has also made it an unviable medium of exchange.

A broadly diversified stock portfolio generally presents a safer option than cryptocurrencies because of their intrinsic value and history of delivering solid long-term returns. Cryptocurrencies may hold greater potential for outsized gains, but come with significant risk.

Bitcoins Are Not Widely Accepted

Bitcoins are still only accepted by a very small group of online merchants. This makes it unfeasible to completely rely on Bitcoins as a currency. There is also a possibility that governments might force merchants to not use Bitcoins to ensure that users' transactions can be tracked.

Effects of Supply on Bitcoin's Price

A scarce asset is likelier to have high prices, whereas one available in plenty will have low prices. Bitcoin's supply is generally well-publicized, as there will only ever be 21 million produced and only a specific amount created per year.

What will trigger Bitcoin crash? ›

What can cause a crypto crash? Crypto prices can be dramatically affected by major events, such as exchanges or coins crashing. They can also sink with higher interest rates, rising inflation and other macroeconomic factors that can affect how confident people feel investing their money in risky alternative assets.

A major factor in bitcoin's rise since the start of the year has been the approval by the US financial regulator in January of exchange-traded funds [ETFs] – a basket of assets that can be bought and sold like shares on an exchange – that track the price of bitcoin.

Common arguments used are the high electricity consumption, volatility, lack of intrinsic value, regulation, hacking, criminal activities etc... Let's examine these arguments against Bitcoin one by one starting with the high consumption of electricity.

If used correctly, Bitcoin can be used as an anonymous currency free from spying governments. When you use Bitcoin, you don't need to provide your email, name, social security number, or any other identifying information. Bitcoin is just numbers, 1's and 0's, traveling through the internet.

Bitcoin Can Circumvent Government-Imposed Capital Controls

Governments often institute capital controls to prevent currency outflows because exports could debase their currency's value. For some, this is another form of control governments exert on entities within their jurisdictions.

Readings between 55 & 80 indicate Bullish condition. Readings between 45 & 55 indicate Neutral condition. Readings between 20 & 45 indicate Bearish condition. Readings below 20 indicate a security is oversold.

While Bitcoin may hold ideological appeal as a challenge to centralized monetary systems, its practical shortcomings render it an impractical solution to economic challenges.

When will the Bitcoin bull run start? Historical Bitcoin prices have shown that halving events have ushered Bitcoin bull runs within the next 12 to 18 months. However, readers should note that past market performance is no guarantee of future returns.

Bitcoin's price, however, has been locked in a slightly downward sloping channel between $50,000 and $70,000, forming a bull flag-like pattern, as opposed to a steep downtrend, contradicting the persistent MACD signal.