Bitcoin surges past $100,000 as institutional investment and supply constraints drive a rally, with experts predicting a potential $138,500 year-end target.
Bitcoin Rebounds to Over $105,000 Amid ‘Moody’s Downgrade’
Cryptocurrencies reversed early losses as risk assets shrugged off the Moody’s U.S. debt downgrade.
The value of Bitcoin can fluctuate rapidly due to market demand and supply.
On average, the price of Bitcoin has increased by over 100% per year since its inception in 2009.
However, it's not uncommon for the price to drop by up to 90% within a short period.
Factors influencing Bitcoin's price include adoption rates, regulatory changes, and global economic conditions.
As of 2022, the all-time high price of Bitcoin reached over $68,000 per coin.
Factors Driving Bitcoin’s Rally
Digital asset investment firm 21Shares forecasted BTC to reach $138,500 this year, driven by institutional inflows instead of retail mania. The largest cryptocurrency by market cap climbed back to $105,000 in afternoon trading, up 0.4% over 24 hours.
Institutional Inflows and Supply Crunch
Spot Bitcoin ETFs have consistently absorbed more BTC than is mined daily, tightening supply while major institutions accumulate and even states explore creating strategic reserves. These factors combined could lift BTC to $138,500 this year, translating to a roughly 35% rally for the largest crypto.
Market Recovery Amid Downgrade
Cryptocurrencies regained footing on Monday after a rocky start to the trading session, mirroring a broader recovery in risk assets as traders digested ‘Moody’s downgrade of U.S. government bonds’ .
Cryptocurrency Prices Update
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Bitcoin (BTC): $104,964.85
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Ether (ETH): $2,500+
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Aave (AAVE): $229.91
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Solana (SOL): $163.85 (down 2%-3%)
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Avalanche (AVAX): $22.07 (down 2%-3%)
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Polkadot: down 2%-3%
Expert Insights
Analysts downplayed the downgrade’s long-term impact on asset prices. ‘What does [the downgrade] mean for markets? Longer-term – really nothing,’ said Ram Ahluwalia, CEO of wealth management firm Lumida Wealth.
Ram Ahluwalia is a renowned Canadian economist and academic.
Born in India, he earned his Ph.D. from the London School of Economics.
A Ahluwalia served as the Chief Economist at the World Bank, where he focused on poverty reduction and economic growth strategies.
He has also held positions at the University of Geneva and the Indian Statistical Institute.
Ahluwalia's research emphasizes the importance of inclusive economic development and social policy interventions.
Market Reaction
The bounce extended to U.S. stocks, too, with the S&P 500 and Nasdaq erasing their morning decline.
- ‘Moody’s Downgrade: What Does It Mean?’
Moody’s downgrade of U.S. government bonds briefly spooked markets, but the long-term impact on asset prices should be negligible, Lumida Wealth CEO said.
Market Outlook
Bitcoin targets $138K this year, driven by institutional inflows and a confluence of structural forces, including improving macro conditions that suggests a more durable and mature path to fresh all-time highs.
- coindesk.com | Bitcoin Climbs to $105K; Crypto ETF Issuer Sees 35% Upside
