Bitcoin‘s price has soared above $42,000, the highest level in the last 19 months, leading to the liquidation of many short positions in the last 24 hours. While many analysts and experts indicate that the bull market has already started, others believe the real bull market will begin following the block reward halving expected in April 2024.
“Bitcoin’s Current State Feels Significantly Different”
In this context, renowned fund manager and asset investor Jeroen Blokland posits that the current Bitcoin rally feels distinctly different from the last time it traded at these levels, and it definitely feels different. Blokland shared his thoughts, stating:
The last time Bitcoin exceeded $40,000 was in May of last year. Subsequent ecosystem collapses and scandals like bankruptcies drove prices down. Since then, many market participants have been focused on the block reward halving, and Bitcoin’s momentum as an ‘accepted’ asset class feels very different compared to the last time it was at the $40,000 levels.
The block reward halving Blokland refers to is a crucial event for both the Bitcoin network and its price. This event occurs approximately every four years and halves the block reward given to miners in Bitcoin, effectively reducing the production of new BTC by half.
Historically, significant price increases in BTC have tended to coincide with major changes across the industry. As we count down the days to the big Bitcoin event in 2024, December stands out as a month typically marked by strong rallies in the cryptocurrency market. Blokland’s comments suggest that significant surges in the price of the largest cryptocurrency could be forthcoming.
Investors Focused on the Critical FOMC Meeting
In addition to a potential spot ETF approval and the rapidly approaching block reward halving, Bitcoin’s price is also influenced by macroeconomic developments. On the macroeconomic front, investors are turning their attention to the Federal Open Market Committee (FOMC) meeting scheduled for December 13th, where the latest interest rate decision will be announced.
At the meeting, the Fed’s anti-inflation policy will be reviewed, and a decision will be made on whether to raise or maintain interest rates. Most market analysts expect the FOMC to keep rates steady, which they believe would sustain the uptrend in risky assets like Bitcoin and altcoins.