Bitcoin, the world’s first decentralized cryptocurrency, reached as high as $42,162, which marked its highest since April 2022.
As bitcoin surpasses new heights, executives in the cryptocurrency industry are hopeful for the upcoming new year.
Reuters reported that on Nov. 4, the world’s first decentralized cryptocurrency reached as high as $42,162, which marked its highest price since April 2022. As a result, cryptocurrency-related stocks and shares listed in the United States also witnessed a surge.
In early 2022, the cryptocurrency market lost $500 billion in value in 24 hours, BLACK ENTERPRISE previously reported. This led to cryptocurrency exchanges, including Coinbase and Crypto.com, to lay off hundreds of employees. For Black investors attracted to Bitcoin’s low transaction fees and ease of use, investing in cryptocurrency was risky, especially when the values were high.
“Most African Americans got into cryptocurrency as the values were high so that means people are losing money,” Algernon Austin, the director of Race and Economic Justice for the Center for Economic and Policy Research, told CNN in 2022.
“And we are talking about a low wealth population losing wealth, that is not a good thing. It is the most risky investment that you can make.”
According to the news outlet, Coinbase (COIN.O) increased to 7.5% after skyrocketing by nearly 62% in November. Last month, bitcoin investor Microstrategy (MSTR.O) purchased the currency worth $593 million and gained 8.2%.
Additionally, the ProShares Short Bitcoin Strategy ETF, which allows traders to profit when the daily price of bitcoin declines, fell to an all-time low of 7.7%. However, according to the outlet, the ETF that tracks bitcoin futures rose 7.7%.
Rallying more than 120% this year, bitcoin is calling the start of a “new bull run,” according to market participants and executives. The industry is not only looking forward to the surge continuing into 2024 but also focusing on positive developments, like the anticipated approval of the bitcoin exchange-traded fund, or ETF. “That could cause a massive upward run in the price,” Vijay Ayyar, vice president of international markets at cryptocurrency exchange CoinDCX, told CNBC.
“The impact of an (ETF) approval is going to be big in terms of investment appetite because it’s going to be more easily regulated, more attractive, and easier to invest,” Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, told Reuters.
“What we have right now is a risk rally, and bitcoin is also benefiting big time from falling yields. There is also this positive bullish sentiment into next year because it is going to be the year of halving.”
Every four years, halving slows the release of bitcoin by reducing the amount of bitcoin awarded to miners by half. Miners receive such awards for completing “blocks” of verified transactions, which are added to the bitcoin network. The maximum supply of circulating bitcoins is capped at 21 million, and 19 million have already been mined.
Typically, bitcoin prices have increased following the halving process. Bitcoin last halved in early 2020, when the reward amount was 6.25 BTC. The next halving is expected to occur in early-to-mid 2024, dropping to 3.125 BTC. At this current rate, the mining of each block has a profit of $231,250.
With the approvals of numerous ETFs, bitcoin is predicted to hit $100,000 by the end of 2024, according to Standard Chartered, an international cross-border bank. Similarly, crypto financial services firm Matrixposo estimated that bitcoin would reach $63,140 by April 2024 and $125,000 by the end of next year. These projections are based on the declining state of inflation, “prompting the Federal Reserve to likely initiate interest rate cuts,” Matrixport reported.
According to Charlene Fadirepo, a Bitcoin adviser, digital currency is an opportunity for Black Americans to “level the playing field for Black Americans who have historically been shut out of the banking and finance industry due to decades of racism,” BE reported.
“This is about responsible and smart investing,” Fadirepo previously told CNN. “If you are not in a position to invest, if you have significant debt, if you have credit challenges, maybe your first step is to focus on that.”