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Bitcoin has been the subject of a great deal of scrutiny recently, as has been the entire crypto market. Analysts are looking to see the BTC price break at least the $50,000 mark. Also, they hope that it would eventually get enough momentum to hit its all-time high and make bigger plays.
Considering that $50,000 is indeed in play, many have been looking towards the possibility of Bitcoin hitting $100,000. The asset is still going through a bit of a bearish cycle. Also, it is becoming more apparent that a huge announcement or adoption will be what will help Bitcoin to grow.
The hope had been that El Salvador’s Bitcoin adoption will spur a jump in the asset’s price, but the excitement for that was short-lived. So, the bearish cycle continues. However, a new hope is coming to the market. – the possible approval of exchange-traded funds (ETFs).
ETFs and Their Potential for Adoption
An exchange-traded fund is a basket of securities that helps to track the performance of an underlying asset. One can buy and sell ETFs on traditional stock exchanges. Also, they offer an interesting way for investors to get into a market.
For years, several financial institutions have applied with the Securities and Exchange Commission (SEC) to launch Bitcoin ETFs. Companies like VanEck, Bitwise Asset Management, and others have sought to launch these products. This way, they hope to improve investor access to the cryptocurrency. However, the SEC has either denied these applications or the applicants themselves have withdrawn their applications due to frustration.
Despite the agency’s behavior, companies remain committed to the launch of Bitcoin ETFs. Interestingly, Mike McGlone, a commodity strategist at Bloomberg, reported that approval for a Bitcoin ETF might come as early as next month.
In an interview, McGlone explained that Canada already has a competitive advantage over the United States when it comes to Bitcoin ETFs, with the former already approving several ETFs earlier this year. He pointed out that the United States’ policymakers are tired of losing out in this market, and that an ETF approval could come in October.
McGlone highlighted that the approval would most likely be a futures-backed product, thus opening a legitimization window for investors to move into the crypto market. The strategist also pointed to a Bloomberg report that predicted Bitcoin hitting $100,000 once ETFs are approved.
Interestingly, Lark Davis, a crypto YouTuber, also pointed out on Twitter that Bitcoin could still very well hit $100,000 by the end of the year. ETFs are coming, as Davis explained, and a price surge could follow.
Will Bitcoin Really Hit $100,000?
With analysis and crypto enthusiasts hailing the approval of Bitcoin ETFs, it is worth considering whether this news could indeed be a catalyst for a move to $100,000
Currently, it seems too early to say. As explained, Bitcoin has been going through a bearish cycle and it will take a great deal to let off. At a current price of $42,167, Bitcoin is trading well below many of its indicators.
The asset is trailing its moving average metrics, ranging from the 10-day moving average of $45,386 to the 200-day moving average of $45,834. The only metric that is trailing Bitcoin’s current price is its 100-day moving average, which is at $40,995. Short and long-term investors who see these metrics will be left underwhelmed as it seems like Bitcoin is still reeling from its price drops.
Bitcoin’s relative strength index also stands at 41.34. Considering that it is the leading cryptocurrency, this metric is incredibly low. It shows that investors are selling off for now as the coin’s price isn’t delivering any gains.
History is also not really on Bitcoin’s side in the race to hit $100,000 this year. This time last year, Bitcoin traded at $10,885 – it went on to hit a high of $29,353 by the end of the year, marking an increase of 169.6 percent.
With Bitcoin currently trading at $42,167, a multiplier will result in a possible price peg of $71,542.
However, there could be some additional news that will propel Bitcoin to even bigger highs. Last year’s gain was due to increased institutional adoption for Bitcoin, with several large firms committing funds to Bitcoin. At the same time, top payment processor PayPal announced that it would also start supporting cryptocurrencies.
The same thing could happen in 2021 – a barrage of adoption news that will send the coin’s price rising. Twitter added crypto support for its Tip Jar feature recently. More news like this – as well as approval for crypto ETFs – could see Bitcoin’s price surging.