Today, one bitcoin costs USD 66,250. Just a few days ago, the rate was hovering around USD 60,000. Where do these reflections come from?
Bitcoin price is rising
We asked Sebastian Seliga from zondacrypto for his opinion. He points out that “US consumer price data released on Monday, May 15, showed that the core consumer price index (CPI) rose less than expected in April.” The latter is of great importance. because it “suggests a possible decline in inflation and increases hope for a future reduction in interest rates by the Federal Reserve.”
And it was from the moment this data was published that the valuation of BTC began to increase.
Let us immediately add that one swallow does not make a summer and it is doubtful that one positive piece of information will prompt the Fed to quickly cut interest rates. We will probably have to wait for a few more meetings of the US monetary authorities.
Not just inflation
However, it is not only inflation that can fuel Bitcoin's growth.
Bitcoin's price also remains undervalued from the perspective of miners' profitability. After the Bitcoin halving that took place in late April 2024, miners' rewards were halved, putting them under financial pressure. Historically, extremely low profitability for miners is often associated with price troughs, which also suggests potential for future growth
– adds Selig.
In fact, this is where investors' greatest frustration can be seen. Quite strange, I might add. In this cycle, traders behaved in a rather surprising way. The narrative that spread on social media showed hope that the halving would immediately start a strong increase. It's never been like this!
As I pointed out on bitcoin.pl, the halving affected the BTC rate, but after a few months. As a reminder: In 2016. the prize distribution took place on July 9, 2016. A few days before the halving, 1 BTC was worth just over USD 600. This level remained more or less until October. And only after a year, 1 BTC cost approximately USD 3,000, and at the end of 2017 the market reached the ATH of the cycle at the level of USD 20,000.
On May 11, 2020, another halving took place. On that day, 1 BTC cost approximately USD 9,500. Strong growth also started with a delay, around the end of the year.
Will it be different now? There is no indication of this. We can rather expect that a full-scale bull market will begin in a few months.
Overall, analysts and industry experts remain optimistic about bitcoin's long-term growth trajectory. As the cryptocurrency market continues to evolve, macroeconomic conditions, regulatory and legal developments, and political factors will play a key role in shaping the future of the cryptocurrency market.
– sums up Selig.
