October 31, 2024 (Globalinvestorideas.com Newswire) Globalinvestorideas.com, a go-to platform for big investing ideas releases market commentary from Rania Gule, Senior Market Analyst at XS.com.
Bitcoin, the world’s most famous cryptocurrency, has experienced a notable rise, recording a price of $72,264 at the beginning of trading on Thursday. In my opinion, this positive trend is closely tied to the current geopolitical conditions and the expectations surrounding the U.S. elections, where Donald Trump’s potential victory is viewed as an additional catalyst pushing prices toward new levels. Trump’s stated positions on cryptocurrencies, which are seen as supportive, enhance investor appetite, positively reflecting on Bitcoin’s performance.
From my perspective, the recent 3.6% rise in Bitcoin, which pushed it beyond the $73,000 mark, may serve as a strong signal that the previous correction period has ended. Markets seem to be regaining confidence in Bitcoin as a safe-haven asset, especially in light of global economic instability. Current support levels at $72,000 and $70,000 suggest the possibility of continued upward momentum, boosting investor hopes for further gains.
On another note, MicroStrategy, one of the largest holders of Bitcoin, released its third-quarter financial report, revealing a Bitcoin yield of 17.8% so far this year. The report indicated that the company plans to raise $42 billion over the next three years to expand its Bitcoin holdings. The plans include raising $21 billion from equity and $21 billion from fixed-income securities, reflecting MicroStrategy’s commitment to investing in Bitcoin as a core asset.
In my view, this investment shift reflects the company’s vision to restructure its treasury in ways that allow for higher returns on its Bitcoin investments. MicroStrategy’s desire to enhance its position in the cryptocurrency world has made it a role model for other companies in the space. I believe its aggressive strategy in purchasing Bitcoin may inspire other companies, including Japan’s Metaplanet, which recently announced it would use Bitcoin yields as a tool to assess its investment strategies.
I also see that the significant decrease in over-the-counter trading flows supports Bitcoin’s price, as trading desks currently hold about 416,000 Bitcoin, reflecting investors’ desire to keep their coins away from the general market. This decline in the amount traded over the counter, which has dropped by 52% compared to the early months of the year, may directly impact the increase in Bitcoin’s price, as it reduces the quantities available for sale in the public market.
Notably, exchange-traded funds (ETFs) have seen an increase in fund flows recently, capturing nearly $4 billion since October 11. In my opinion, these flows indicate a renewed interest in Bitcoin, reflecting investors’ movements toward cryptocurrency assets as the U.S. elections approach. Trump is viewed as a candidate supportive of cryptocurrencies, which bolsters optimism in the market and provides an additional boost to Bitcoin.
However, caution is warranted amid the volatility in financial markets. The current price increase may merely be a temporary spike, and the market could face future fluctuations due to political or economic changes. Nevertheless, optimism persists amid growing technical support and positive sentiments toward Bitcoin as an investment asset.
The current situation creates an encouraging environment for investors, as Bitcoin seems to be moving toward new peaks with strong institutional support and positive market outlooks. With major companies like MicroStrategy committed to investment restructuring and achieving returns on their investments, it appears that Bitcoin may be on its way to achieving new historic highs shortly.
But the question remains: Will Bitcoin be able to maintain its current momentum and overcome new obstacles? The answer depends on geopolitical factors and the overall economic climate, but optimism remains high among investors, especially with continued acquisition support from major companies and positive visions for the future of cryptocurrencies.
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