Markets
Russian experts say Bitcoin bull market will not reach 2017 highs
Last updated: May 21, 2024 7:30 pm EDT | 3 minute read
The current Bitcoin bull market is still not below the 2017 highs, Russian experts said on May 20.
The comments came in on the topic of Bitcoin and cryptocurrency report by the Roscongress Foundationone of the largest Russian development-focused NGOs and conference organizers.
“Bitcoin bull market fever will falter” – experts chime in
The authors of the report said that BTC’s new all-time high in March this year was part of a “speculative play” played “against the backdrop of spot approvals of Bitcoin ETFs.”
However, Bitcoin’s sudden price growth in March “did not cause a similar stir to the situation in late 2017,” they wrote.
The authors pointed out “cryptocurrency-related” Internet search engine queries, which have “remained well below peak values.”
Michael Novogratz, founder of Galaxy Digital, said that Bitcoin will likely remain stuck in a relatively tight trading range for at least the current quarter. https://t.co/KuTeCZSVlt
— Bloomberg Crypto (@crypto) May 21, 2024
The authors added that in 2024 only half as many people worldwide were searching for BTC and cryptocurrency-related topics compared to 2017.
Better access to Bitcoin thanks to ETF approval, experts say
The experts also noted that analysts had said that spot Bitcoin ETFs would “make cryptocurrency investing more accessible to a wider range of people.”
But the evidence seems to suggest this has not yet happened, the foundation said.
The authors explained that “transaction protocols based on mining the Bitcoin network” are an “obstacle” to “full inclusion” in the mainstream financial system. The authors wrote:
“In general, cryptoassets are not yet suitable for full integration into the traditional financial system. The main thing holding traders back is the fact that cryptoassets are not suitable for clearing.”
In the financial world, compensation (aka “netting”) refers to the “net presentation of separate assets and liabilities or revenues and expenses on the balance sheet.”
The foundation added that market data shows that most investors still view Bitcoin as a “high-risk asset” in the same way as “tech stocks.”
Furthermore, the authors stated that BTC is “much more strongly correlated to stock market movements” than to assets such as gold. As such, it falls within the profile of a “classic high-risk speculative asset”.
Update: @JSeyff and I’m increasing our Ether ETF spot approval odds to 75% (up from 25%), hearing rumors this afternoon that the SEC might do a 180 on this (increasingly political issue), so now everyone hurry (as we assumed everyone else would be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
The authors also spoke of a “weak reaction” in the Bitcoin market compared to April halving event”, and added:
“The behavior of an asset is increasingly determined by the general level of willingness of financial market participants to take risks.”
Russian government tells loss-making Gazprom not to pay dividends for 2023 https://t.co/qnqypdsclZ pic.twitter.com/Ww1KwmbToC
— Reuters (@Reuters) May 20, 2024
However, the report was not entirely negative regarding BTC or the effect of the spot approval of the Bitcoin ETF in the United States. The authors wrote that in the long run:
“The emergence of spot bitcoin ETFs will undoubtedly make cryptocurrency investing more accessible to all market participants.”
But they said the temporary price increases were the result of “speculative play” by traders seeking to take advantage of ETF approvals in Washington.
They added that the “range of Bitcoin price predictions for the end of the year” is “extremely wide.” The authors explained:
“At the high end, the average high forecast is $121,764, while the average low is $50,138.”
Do Stablecoins Affect Bitcoin Prices?
The authors also noted that there was a “growth in the capitalization of stablecoins“since 2017.
And, they said, this helped spur a Bitcoin bull market in both 2021 and 2024. The authors wrote:
“The first wave of [Bitcoin price] the growth in 2017 was caused by the popularization of cryptocurrencies. The second, in 2021, can be explained by a sharp increase in the supply of stablecoins and the transfer of prices to virtual spaces.”
The experts concluded that the 2024 all-time high was “due” in part to “a reset in stablecoin supply.”
Earlier this month, Russian experts said BTC and altcoin mining is expected to grow 20-40% by the end of the year.