Bitcoin and Ethereum are nearing historical highs, but many important factors have not been fully reflected, which could push prices even higher.
The cryptocurrency market is facing four strong drivers including governments buying Bitcoin, looser policies from the Fed, reduced volatility attracting institutions, and a new wave of promising ICOs.
MAIN CONTENT
The governments of many countries are expected to start buying Bitcoin, creating significant demand.
The Fed may cut interest rates further, supporting the appreciation of cryptocurrencies.
Bitcoin's price decrease in volatility attracts institutional investors and significantly increases ETF inflows.
Which governments could start buying Bitcoin?
Currently, ETFs and corporate treasury funds are hoarding large amounts of Bitcoin, but the government has not yet fully participated.
For example, Pakistan has planned to establish Bitcoin reserves, Abu Dhabi is investing in Bitcoin ETFs, and the Czech Republic is also showing positive signals. The announcement of a few central banks buying Bitcoin could mark a turning point for prices.
The entrance of the government will increase the legitimacy and supply-demand of Bitcoin, driving demand far beyond the total amount of Bitcoin mined in 2025.
How could the Fed change monetary policy profoundly?
Although interest rates remain high, Bitcoin shows unusual strength. The market forecasts several rounds of rate cuts; however, according to assessments, a deeper cut scenario could completely occur.
The arrival of Stephen Miran, a proponent of loose monetary policy, into the Fed makes the possibility of interest rate cuts from three rounds to six or eight rounds entirely feasible.
Strong easing policies will reduce the strength of the USD, which usually helps Bitcoin rise quickly and sustainably.
"The market does not rise because of good news, but rises when good news is not yet priced in."
Matt Hougan, Chief Investment Officer of Bitwise, 2024
Why does reduced volatility attract institutional investors?
Since the launch of spot Bitcoin ETFs at the beginning of 2024, Bitcoin's volatility has decreased sharply, comparable to growth tech stocks like Nvidia.
This stability helps large institutions feel more confident in capital allocation, starting with an average of 5% of their portfolios. Inflows into ETFs have increased by $5.6 billion since July, demonstrating rising demand.
This trend is expected to continue as many institutional investment funds recognize the potential for profits alongside better-controlled risks.
How will ICO 2.0 change the cryptocurrency financial landscape?
The ICO wave is cautiously returning under the coordination of the U.S. Securities and Exchange Commission (SEC), with the 'Project Crypto' aimed at providing legal protection for new token offerings.
Clear regulations on token launch, airdrops, and network rewards pave the way for new capital and technological innovation in the cryptocurrency field.
The ICO 2.0 phase promises to bring new life to the cryptocurrency space, supporting breakthrough growth in the medium term.
Frequently Asked Questions
Which government has started buying Bitcoin and what is the impact?
Pakistan plans to create Bitcoin reserves, Abu Dhabi is investing in ETFs, these signals are boosting prices due to increased demand and enhancing cryptocurrency reliability.
How is the Fed expected to change policy and its impact on Bitcoin?
The Fed may cut interest rates deeper in three rounds, which weakens the USD and usually stimulates Bitcoin's price increase.
What does reduced volatility of Bitcoin mean for institutional investors?
Low volatility helps institutions better assess risks, leading them to invest more in Bitcoin and ETF products.
How does ICO 2.0 differ from previous ICOs?
ICO 2.0 has stricter legal regulations, protecting investors and expanding legitimate fundraising opportunities for cryptocurrency projects.
Why hasn't the market fully reflected these factors?
Information about policies, regulations, and institutional demand is often updated slowly, so prices have not yet had time to reflect these positive news.
Source: https://tintucbitcoin.com/4-dong-luc-giup-bitcoin-ethereum-tang-manh/
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