The US Federal Reserve, in recent announcement on Wednesday, decided to keep interest rates stable within the range of 5.25% to 5.5%. This move has affirmed the market’s optimistic outlook that has been prevailing since October. After a prolonged period of stagnation, the cryptocurrency market has experienced a resurgence, leading to Bitcoin (BTC) making significant gains and attracting increased liquidity. Investors seized the opportunity to acquire more BTC when its price dipped to $33,000 before the subsequent bullish surge.
Following the Federal Open Market Committee (FOMC) meeting, Bitcoin’s price surged beyond $35,000, marking a new high for the year. At present, BTC is valued at $35,383, reflecting a 3.3% increase within a 24-hour period. Notably, Ethereum, Cardano, and Solana also joined the upward trend, recording gains of 2.1%, 7.8%, and 13.2% respectively.
A prominent Bitcoin advocate is now forecasting a bullish run in the final quarter of the year. Let’s delve into the reasons behind this prediction.
Michael Saylor’s Bullish Outlook
Michael Saylor, the outspoken proponent of Bitcoin and executive chairman of MicroStrategy, recently shared his unwavering confidence in the cryptocurrency during an appearance on CNBC. While Saylor’s ardent support for Bitcoin is well-known, his insights into the specific drivers of cryptocurrency growth warrant attention.
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What’s Driving Bitcoin’s Growth?
Saylor emphasized several impending factors that could propel Bitcoin to new heights. A major development on the horizon is a significant reduction in Bitcoin supply, coupled with surging demand. Currently, Bitcoin miners are compelled to sell a substantial portion of their mined Bitcoin to cover operational costs, amounting to a staggering $1 billion per month.
However, the upcoming halving event scheduled for April 2024 will halve miners’ available supply for sale, reducing it to $6 billion annually. This supply reduction has the potential to create a supply-demand imbalance that favors Bitcoin.
Fair Value Accounting Rules
Saylor also underscored the forthcoming implementation of fair value accounting rules for corporate Bitcoin holdings. According to him, this regulatory shift will facilitate greater adoption of Bitcoin as a treasury asset by various companies. This move could potentially result in a significant increase in shareholder value through their balance sheets.
We’re Surrounded by Challenges!
In addition to his positive outlook, Saylor addressed the current state of the cryptocurrency industry, acknowledging ongoing issues such as the legal proceedings involving Sam Bankman-Fried. Saylor contends that the crypto industry needs to evolve and mature, shedding its early “crypto cowboy” image. He suggested that the sector should distance itself from numerous speculative crypto tokens and unreliable custodians that have eroded shareholder value over the years.
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So when Saylor says “adult supervision” in the crypto space it reflects a broader sentiment echoed by many industry leaders. This vision, if realized, could propel Bitcoin to new heights, potentially tenfold from current levels.
