Historical trends are very important for the cryptocurrency environment, as they offer a strong indication of what investors can expect every year. Traditionally, September has been a difficult month for the crypto space, but October is a different matter altogether. Since 2013, BTC finished the month with gains for eight out of ten times. This has fueled positive sentiments among investor, leading them to buy Bitcoin and add it to their portfolios, expecting a positive trend from the rest of the month.
Graphs show that, in the past, October and November have been the highest-performing months for Bitcoin have been October and November. So, is it safe to assume that this period of 2023 will yield the same results?
The Bitcoin price surged by 4% in just a quarter of an hour on October 1st, showing that the prices will likely rally this month. Ethereum followed in Bitcoin’s footsteps, climbing as well. More than $70 million worth of crypto shorts were liquidated as a result. From $27,100, Bitcoin jumped to $28,053, then definitively settled in the $28k area.
Ethereum gained 4.7% during the spike, achieving the $1,755 level before going lower at $1,727. However, the movement hasn’t gone unrecognized by the crypto community, and there were many analysts that believed this surge clearly signifies the start of what is informally known as Uptober. The ecosystem is still looking forward to the approval of a BTC exchange-traded fund. However, there’s still no conclusive decision from the US Securities and Exchange Commission.
Some analysts believe that January 2024 is the time when an announcement is likely to appear. Those holding long positions have celebrated the arrival of the first price action in over a month. Short sellers, at the other end of the spectrum, however, didn’t have as much luck.
$600 billion demand
A recent report estimated that Bitcoin ETFs could soon reach $600 billion in demand, double the amount of the current crypto market capitalization. Exchange-traded funds provide investors with regulated exposure to various holding classes, including Bitcoin. The official approval would democratize finance as well as investments in the digital money sector.
With many anticipating a decision for sometime around the beginning of 2024, it’s also believed that the ETFs have the potential to climb to $600 billion in demand. However, the predictions are speculative, and the outcome will depend on several factors. The Ark 21Shares application has already been delayed several times. Founder Cathie Wood said that the delays were expected and that the SEC will most likely approve all the different Bitcoin ETFs at the same time.
The delays have drawn criticism from investors and fueled frustration. Congressional pressures continue to make the path toward approval even more complicated, contributing to uncertainty and, implicitly, to price stagnation. It’s plain to see that the future of cryptocurrency regulations remains a controversial topic.
Greyscale revenue
Greyscale Investments, the American crypto management company, generates revenue from exchange-traded funds through the creation and use of management fees. The resulting costs are calculated as a percentage of the total AUM. The company also has its own product, GBTC, the Grayscale Bitcoin Trust. It has an associated annual fee of 2%.
In actual figures, this means that Grayscale gets approximately $324 million each year solely from the management fees of the Bitcoin Trust. That represents 2% of the whole $16.2 billion value in assets. The AUM has the potential to increase, owing to the potential appeal from institutional investors, which would also boost the management fees. However, it’s important to remember that Grayscale plans to lower expenses upon ETF conversion. As of yet, however, no specific numbers have been provided.
Artificial intelligence
Everyone is talking about AI and its potential for different businesses and sectors. Several chatbots have also become more popular and have even been used to help users with the most mundane tasks. Many are curious about how they can be used, as well as how far their use cases could go. The most obvious in the cryptocurrency community is to ensure help when it comes to predictions.
The digital money environment is notoriously volatile, so investors are constantly looking for data that can help them establish patterns. This includes historical trends, charts, graphs and the intervention of both internal and external factors. However, all this information can sometimes be challenging to analyze, which is where AI comes in handy.
Given that the bear market has continued to reign supreme for a while now, the question on everyone’s minds is when will the next bullish rally start. The latest artificial intelligence-based predictions follow previous patterns established by the technology. Instead of providing definitive deadlines and specifics, the AI lets investors know what they should look out for.
Some of the most important metrics are:
- Regulations
- Macroeconomics
- Tech developments and their use in the industry
- Institutional engagement rates and investing power
For instance, when it comes to regulations, their presence or absence has a considerable impact on the overall market. When there’s clarity and the rules are favorable, the market will thrive, which is crucial for the price points. At the other end of the spectrum, uncertain or unfavorable regulations will have the exact opposite effect.
Macroeconomics is also essential since, although Bitcoin isn’t tied to traditional financial markets, its movements nonetheless impact it. Inflationary pressures and the interest rate hikes have both been significant for cryptocurrencies. Ordinals are the most crucial tech development in Bitcoin for 2023, and the protocol has ushered in even more engagement on the blockchain.
The bottom line
Although Bitcoin remains a solid investment, most investors also want to see change. The latest price climb has renewed hope and brought optimism, as well as the certainty that things will gradually begin to change from now on. It remains to be seen just how significant this change will be and how long it will likely last.
In the meantime, investors should remain vigilant and aware of all the changes. It could be the difference between gains or losses.