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Bitcoin in a Bull Run: New Ceiling At $100k, Says Bloomberg

The oldest and the most significant crypto, Bitcoin, rose for the fifth day in a row – the longest streak since September.

The crypto markets are edging up as investors re-embrace risk assets. As a result, tech stocks are up, and so are the major cryptocurrencies.

So much so that the total crypto market cap reclaimed $2 trillion in valuation. Bitcoin gained as much as 5.4% in valuation, reaching $43,600.

Most other significant cryptos were up as well, as crypto markets tend to follow Bitcoin’s movements. For example, the most prominent bright contract coin, Ethereum, rose 4.3% to $3,100, while BNB rose to $437.

Ethereum competitors Cardano and Solana were up 8% and 7%, respectively. Cardano reached 1.2$ while Solana was at $121.

The biggest winners were Ripple (XRP), rising 16%, and  Shiba Inu. The second-largest dog-themed coin rose a whopping 41% in the last 24 hours.

BTC and Tech Stocks

Crypto markets have been in bear mode since November 2021, after Bitcoin reached a record of $69,000. Since then, the Federal Reserve policy shift toward tightening made risk assets less attractive.

This has contributed to a strengthening of the link between Bitcoin and stocks. In particular, between BTC and tech stocks and the Nasdaq.

The tech-focused Nasdaq index, big tech companies, and crypto have suffered since then. Now, with rate hikes priced in, some investors may be wondering whether risk assets are oversold.

However, others believe that there could be something else at play. According to a Bloomberg Intelligence report, cryptos could have a lot of upside in 2022.

Bitcoin’s New Ceiling at $100,000?

Bloomberg’s February Crypto Outlook suggests that Bitcoin, Ethereum, and stablecoins will continue to do well.

For BTC, fundamentals, and technicals are improving. On the technical side, Bitcoin’s recent moves look like they form a floor at $40,000.

This floor activity could be ending, pointing to a bullish upswing. On the flip side, the new ceiling could at $100,000.

Fundamentals are good as well. In particular, Bitcoin is likely to do well against commodities. While oil rose in geopolitical turmoil, commodities rose.

First of all, commodities surged in 2022. The Bloomberg Commodity Index was up 10% in 2022. On the other hand, the Galaxy Crypto Index dropped about 20% in the same period. This relationship could soon flip, however.

BTC vs. Oil

Bitcoin, Ethereum, and crypto dollars top the list. However, the first two share an attribute that sets them apart from commodities — a lack of supply elasticity.

The rules of supply and demand elasticity, and adoption of a revolutionary technology/asset, may continue to buoy crypto price appreciation vs. commodities

Firstly, Bitcoin represents advanced technology, while oil is on its way out. EVs, renewables, and hydrogen are rapidly expanding.

On the other hand, unlike oil, Bitcoin does have any supply elasticity. So when oil goes up in price, producers tend to produce more to capture the profits. This tends to put downward pressure on the price.

Bitcoin, Ethereum and crypto dollars top the list. The first two share an attribute that sets them apart from commodities — a lack of supply elasticity.

The same is not possible with Bitcoin, Ethereum, and other major cryptos. No matter what demand for Bitcoin is, its supply is fixed. That means that if demand surges, the price can only go up.

Altcoins and ETH

At the same time, Bitcoin is facing competition from other cryptos. Bitcoin dominance, its share of the total crypto market cap, fell by 20% since May last year. BTC’s share of the crypto market cap fell from 61% to 41%.

Much of that drop can be attributed to stablecoins and Ethereum. Ethereum’s dominance rose from 11% to almost 20% in the same period. Still, a handful of cryptos dominate the total crypto market cap. That is despite the massive speculation in 2021.

The market cap of Bitcoin, Ethereum, and USD stablecoins still make up 70% of all crypto markets. This figure remained stable in the same period. The Bloomberg report says that this number will continue to go up.

Ethereum, in particular, has an upside as stablecoin adoption picks up. The Ethereum network is what first enabled these stablecoins to work.

The nascent technology allows the ability to transact dollars around the clock at little cost and earn interest, and is key part of the revolution in digital assets.

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USDT, or Tether, is the third-largest crypto asset by market cap. It trails only Bitcoin and Ethereum. These stablecoins, together with NFTs, are a vital source of demand for Ethereum. Therefore, their adoption will boost the price of Ethereum as well.

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