What are the primary factors responsible for the current surge in the Crypto Market? Find out the major causes.
The cryptocurrency market experienced significant growth in the last 24 hours, with Ethereum (ETH) and Ethereum Classic (ETC) leading the way. This surge in activity resulted in approximately $280 million worth of liquidations for both long and short traders, highlighting the increased volatility in the market.
The positive outlook for cryptocurrencies that began in early 2023 is expected to continue over the next two years as more investors embrace blockchain technology and Web3 products. Additionally, trading volume for cryptocurrencies increased by over 40 percent to approximately $120 billion, driven by a sense of greed and fear among traders, as indicated by the fear and greed index.
There are several key factors that contributed to the recent gains in the crypto market:
1. Spot Bitcoin ETF Approval in the US: After a long wait and persistent lobbying efforts, institutional investors in the United States can now access Bitcoin through exchange-traded product (ETP) shares offered by 11 fund managers. Notably, three out of the five commissioners from the United States Securities and Exchange Commission (SEC), led by Chair Gary Gensler, approved the listing and trading of spot Bitcoin ETFs. This approval has eliminated previous uncertainties surrounding the mass adoption of cryptocurrencies in the US.
2. Altseason Narrative: As the price of Bitcoin nearly tripled in 2023, crypto investors have started diversifying their portfolios by investing in alternative coins (altcoins). This rotation of funds has been supported by a 16 percent increase in the price of Ethereum against the US dollar in the past five days, reaching a new record high of $2,614. The total market capitalization of altcoins has successfully retested a major breakout and is on track to surpass $1 trillion in the near future.
In summary, the recent gains in the cryptocurrency market reflect the growing interest and adoption of digital assets. With the approval of spot Bitcoin ETFs in the US and the increasing popularity of altcoins, the crypto market is poised for further growth in the coming years.
Tags: Altcoins, Bitcoin, Price Analysis