Bitcoin, the cryptocurrency for which blockchain technology was created and the largest one in the market to date, has witnessed tremendous popularity ever since its emergence in 2009. The Bitcoin price chart registered astronomical price fluctuations, with values climbing and dropping unexpectedly and making many investors reconsider their investment strategies. These intense changes are the elements that created room for the quick returns on investment generated by day traders who were quick on the uptake to take advantage of the sudden price surges. However, these days, when the market is swimming in hazy waters, it seems like the safest holding strategy for those owning Bitcoin or any other cryptocurrency is approaching a long-term perspective.
Bitcoin has proven its resilience over time, and bear markets are nothing to fear. Bear markets are always known to return after bearish periods, so if you’re an aspiring investor or believe that Bitcoin will bounce back to its glory days, you should consider some aspects before turning your funds to BTC.
Institutional Interest in the Asset Is Experiencing a Surge
The attitude of huge investors such as institutions has always represented an important factor governing the way prices of digital coins behave. Given the increased regulatory pressure worldwide, more institutional players such as endowments and pension funds are focusing on blockchain solutions, cryptocurrencies, decentralized applications, and the whole package that has been introduced with the emergence of Bitcoin.
This heightened interest boosts the reigning crypto’s credibility and genuineness and can be a reliable driver of the asset’s price. This trend strengthens experts’ opinion that a bull market is right around the corner and that it’s just a matter of “when” and not “if.”
There Are Ongoing Improvements in the Institutional Infrastructure
Together with heightened institutional interest comes a higher need for a more robust, better-developed infrastructure that can facilitate investments and exchanges in crypto assets. The emergence of institutional-grade infrastructure from crypto firms to promote more widespread adoption of these assets has pushed the Bitcoin ecosystem to expand to new horizons.
Regulated cryptocurrency exchanges have developed and now offer customers Bitcoin futures contracts, or an agreement where the two involved participants must trade an asset or its corresponding amount in cash at a pre-established moment in the future. This new advancement has contributed to and helped institutions gain more exposure and facilitate their journey in cryptocurrency while acting in conformity with the regulations.
Besides future contracts, other developments such as OTC trading desks, custodial services, and crypto-centered investment funds encouraged them to make forays into this financial sector since it was easier and safer to gain exposure. The fewer obstacles to entering the crypto market for significant investors, the higher the growth of the crypto field.
Additionally, more than three months ago, there were over 30 proposals filed and registered by the SEC to open spot Bitcoin ETFs that would facilitate exposure to the asset. While the SEC has persistently rejected the applications, experts believe they have a good chance of being approved sooner rather than later.
Bitcoin Is Continuously Witnessing Technological Developments
With the never-ceasing improvements of the Lightning Network, the long-criticized issues of this ledger will finally be solved. Bitcoin is known to lag in terms of scalability compared to other more advanced networks, such as Ethereum, which were created with different purposes in mind and took inspiration from Bitcoin. Ethereum, for instance, gave rise to several dApps to revolutionize the business model and make it easier, safer, and cheaper for interested parties to conduct financial transactions such as trading, borrowing, lending, or even warning interest. These all pushed intermediaries aside and helped businesses cut the costs of asset transactions in the traditional financial system.
These tech improvements will likely increase confidence in the asset and drive mainstream adoption, possibly helping its value grow. The project is in its infancy stages, where all the potential hasn’t yet been unlocked. Nonetheless, it has made considerable strides in the past few months. The number of Lightning nodes, or software linked to the blockchain and the network itself, has exceeded the 1K achieved in 2022 to reach around 10,000. Similarly, the amount stuck in the network has grown from $10 million at that time to more than $1 billion nowadays.
It’s important to acknowledge all the enhancements in the Bitcoin network, as they can act as a catalyst for price fluctuations to move in favor of traders since the platforms become safer, more convenient, and affordable to use. These can ultimately make Bitcoin climb in price if demand for the services accelerates, too.
Increased Regulatory Clarity
The ambiguities of the regulatory framework have consistently put barriers in the way of those inclined to get into cryptocurrency, representing a primary source of instability. However, lately, some heartening steps have been taken in this regard, with some countries making Bitcoin legal tender, such as El Salvador. Others have created clear legislative rules to monitor crypto trading and usage, offering investors and small- to large businesses a more robust framework for guidance.
The fact that the regulatory system is no longer as confusing as some time ago makes the crypto sector more appealing to institutional investors previously held back by this off-putting factor. They needed to know where they stood legally and clear objectives to meet and rules to follow.
It may foster the expansion of crypto-related services and businesses, ultimately leading to a genuine market.
Is Bitcoin Surpassing $27,000 Again?
At the moment of writing, Bitcoin’s price is slightly above the $26.500 mark, trading just a little lower compared to its performance on Monday. At the beginning of the current week, it overtook its last performance by reaching the well-awaited $27,000 level. Some months ago, the crypto community had high hopes it would exceed the $26.000 mark, but it also surpassed these expectations and won this lever over, too. Similar performances are excluded from a potential scenario, though price movements remain unpredictable as always.
If you want to invest in Bitcoin or any other cryptocurrency, remember that the market is full of surprises. Prepare with knowledge in advance, and stick to your strategy should you navigate unsettling waters.
