Bitcoin’s $100,000 dream: How close are we to crypto’s biggest milestone?

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As a seasoned crypto trader with battle-scarred fingers from countless market swings, I must admit that the current bullish momentum is both exhilarating and nerve-wracking. Having weathered multiple crypto winters and witnessed the birth of several altseasons, I can’t help but feel the anticipation building in the air.

As I watch Bitcoin inching closer to $100,000, I can’t help but wonder: Is this the early stage of an extended bull run, or could market turbulence disrupt its trajectory for both Bitcoin and other cryptocurrencies?

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BTC shatters records again

Recently, Bitcoin (BTC) has been experiencing rapid growth, effortlessly surpassing significant milestones that seemed insignificant. As of November 21st, it’s trading at an astonishing $97,000, reaching a record high of $98,350, which represents a 3% increase in the past day.

2021 has proven to be an extraordinary year for me as a Bitcoin trader, witnessing Bitcoin’s value more than double, reaching unprecedented heights. In the past fortnight, I’ve seen BTC surge a staggering 40%, propelling its market capitalization to an astonishing $1.93 trillion.

A significant portion of this increase in activity can be attributed to Donald Trump’s recent win in the presidential election. Investors appear hopeful about what lies ahead, given that Trump has expressed his intention to turn the United States into a global leader in cryptocurrency.

As a result, there has been a surge of institutional investment into Bitcoin-centric exchange-traded funds (ETFs) within the U.S., totaling over $4 billion since the recent election.

On November 20th, United States Bitcoin Exchange-Traded Funds (ETFs) experienced a third consecutive day of investments, accumulating approximately $773.47 million. Over the course of the past three trading days, these ETFs have attracted more than $1.8 billion in total, as per data from CoinGlass.

Increased involvement in Bitcoin indicates a rising interest among institutions, driven by anticipation for regulatory guidance and expanding opportunities for crypto-related financial services.

With Bitcoin surpassing $100,000 appearing increasingly inevitable due to growing institutional investment, ETF inflows, and market excitement, the question arises: What happens next for altcoins? As Bitcoin gains speed, let’s consider the fate of other cryptocurrencies.

How Bitcoin options are supercharging its surge

Although exchange-traded funds focusing on Bitcoin (ETFs) have significantly contributed to its current growth spike, the addition of options trading for these funds has sparked an extra dose of anticipation and impact on the financial market.

A standout example is BlackRock’s iShares Bitcoin Trust ETF (IBIT), which debuted its options contracts on Nov. 19. The results were nothing short of spectacular.

On its initial day of trading, IBIT options accumulated approximately $1.9 billion in total exposure, which was achieved through 354,000 contracts – 289,000 call options and 65,000 put options. This information was shared by Bloomberg ETF analyst James Seyffart.

UPDATE: Final tally of $IBIT’s 1st day of options is just shy of $1.9 billion in notional exposure traded via 354k contracts. 289k were Calls & 65k were Puts. That’s a ratio of 4.4:1. These options were almost certainly part of the move to the new #Bitcoin all time highs today

— James Seyffart (@JSeyff) November 19, 2024

On the initial day, a significant majority (around 80%) of IBIT’s option transactions showed a high level of optimism towards price increases, suggesting that traders are generally quite positive about market trends.

Compared to the $363 million earned during its initial trade day, the activity surrounding this event is significantly greater than that of the ProShares Bitcoin Strategy ETF (BITO), which was the first Bitcoin futures-based ETF launched in the United States.

As a researcher, I find myself in agreement with Eric Balchunas, an analyst at Bloomberg, who emphasized the extraordinary scale of the Initial Blockchain Technology (IBIT) launch. In his opinion, the $1.9 billion exposure on its debut day is remarkably substantial and virtually unparalleled in the realm of day one exposures, a point that I find quite intriguing.

As an analyst, I must say that the $1.9 billion volume on Day One is truly remarkable and sets a high bar. To put this into perspective, $BITO, which has been around for four years, only managed $363 million in that timeframe. It’s important to note that we’re dealing with 25,000 contract position limits here.

— Eric Balchunas (@EricBalchunas) November 19, 2024

As a researcher, I found it noteworthy that BlackRock’s IBIT maintained its dominance on November 20th, adding another $1.9 billion to its notional exposure. According to James Seyffart, Bloomberg ETF analyst, this accounted for an astonishing 97% of the total options volume across all Bitcoin spot ETFs that day, highlighting its significant role in the market.

Yesterday, the distribution of Bitcoin ETF options volume leaned significantly towards option for #IBIT. Interestingly, IBIT saw nearly identical trading activity as its initial day, approximately $1.9 billion in notional exposure. However, it accounted for an impressive 97% of the total volume. Here’s hoping that this discrepancy will balance out somewhat with the involvement of arbitrageurs and quantitative analysts (arbs/quants) in the near future.

— James Seyffart (@JSeyff) November 21, 2024

Beginning today, November 21st, Grayscale has expanded the intensity of its offerings by making its Bitcoin spot ETF products (Grayscale Bitcoin Trust – GBTC and Bitcoin – BTC) eligible for options trading.

In simpler terms, just like other companies, Bitwise’s ETF for Bitcoin is providing comparable choices and tools that enable investors to safeguard their investments and carry out sophisticated trading tactics.

$100K BTC: Are we there yet?

Bitcoin is sitting on the brink of an unprecedented milestone: $100,000. With its current price hovering around $96-$97k, it feels like the crypto giant is merely inches away from crossing into six-figure territory.

In a recent ruling, a court based in Shanghai made it clear that it’s perfectly fine for people to possess cryptocurrencies, despite the fact that companies are prohibited from participating in transactions related to cryptocurrencies.

Judge Sun Jie, based at the Shanghai Songjiang People’s Court, expressed this viewpoint in a post published on the Shanghai High People’s Court’s official WeChat platform.

Historically, China’s stance on the cryptocurrency market has been unpredictable. When there are announcements about approval or clarification coming from such a significant market, worldwide trust in Bitcoin tends to increase significantly.

This statement can be rephrased as follows: The timing is ideal because the announcement comes at a time when Bitcoin is reaching all-time high prices, suggesting that cryptocurrency acceptance is gradually advancing, even within tight regulatory conditions.

Meanwhile, in the U.S., Bitcoin ETFs have shattered expectations.

Eric Balchunas from Bloomberg noted that the collective investment in Bitcoin ETFs has soared to an astounding $104 billion, with this year alone contributing $30 billion, which is twice the original forecast.

Discussing significant milestones, US Bitcoin Exchange-Traded Funds (ETFs) have amassed approximately $104 billion in assets (due to an overnight price increase), with year-to-date flows approaching $30 billion – twice our initial projection. This places them just 97% of the way towards becoming the largest Bitcoin holder, and 82% of the way towards surpassing gold ETFs.

— Eric Balchunas (@EricBalchunas) November 21, 2024

Essentially, these ETFs are almost there in reaching the point where they will become the biggest Bitcoin holders, surpassing Satoshi Nakamoto, and they are also very close to outranking gold ETFs.

Adding to the bullish sentiment, U.S. Senator Cynthia Lummis has been advocating for Bitcoin on a national level. Lummis proposed creating a strategic Bitcoin reserve earlier this year and has since linked Bitcoin to strengthening the U.S. dollar and addressing national debt.

Wishing for a method to free our country from debt without compromising the U.S. dollar’s power. Guess what? Bitcoin might be it. #BITCOINAct

— Senator Cynthia Lummis (@SenLummis) November 19, 2024

Her latest tweet hinted at Bitcoin as a potential solution to the national debt crisis, wrapped in the tagline “#BITCOINAct.”

On the other hand, Miles Deutscher highlighted an interesting pattern: Large Bitcoin holders, or ‘whales’, are actively unloading their Bitcoin, while retail investors, energized by ETF inflows, are rapidly purchasing BTC instead.

Very interesting $BTC data.#Bitcoin whales are aggressively selling, whilst retail (spot ETFs) are aggressively buying.

ETF flows must remain strong or else long-term holder sell pressure may catch up to the market.

— Miles Deutscher (@milesdeutscher) November 21, 2024

The struggle between whales (large investors) and retail traders over Bitcoin adds a degree of unpredictability. For Bitcoin to persist in its upward trend and reach $100,000, ETF investments should match the pace. If long-term holders persistently sell and ETF purchases decrease, the market may experience volatility.

Still, the bullish momentum is undeniable, and BTC could break past $100,000 at any time. However, nothing in the crypto market comes with a guarantee, so brace yourselves for sudden changes.

Will altcoins steal the spotlight?

As Bitcoin marches toward the $100,000 milestone, the big question is: what happens next?

In crypto trading, it’s common to observe patterns where Bitcoin tends to set the pace, followed by a shift in focus towards other digital currencies or altcoins. This cyclical behavior is characteristic of the crypto market.

According to well-known cryptocurrency expert Michael van de Poppe, we might soon witness a steep correction in Bitcoin prices, followed by a substantial decline in altcoins. After that, he predicts an exciting period of growth for alternative coins, which could be quite intense.

The original bitcoin theory remains valid. We anticipate a significant plunge or sudden drop in the price of Bitcoin, which will also lead to a substantial fall in other cryptocurrencies (Altcoins). Following this event, there will be a rotation phase and we’re likely to experience an extended period of high activity for altcoins (altseason). Prior to this occurrence, reaching $100,000 per one Bitcoin is likely imminent.

— Michaël van de Poppe (@CryptoMichNL) November 21, 2024

As a crypto investor, I’ve been keeping an eye on the Bitcoin market, and it’s important to note that some analysts predict a potential sharp pullback following Bitcoin’s price crossing the $100K mark. While this might initially seem unlikely, it’s not entirely out of the question given historical market patterns.

As a crypto investor, I’ve learned that Bitcoin tends to experience corrections during spells of rapid growth – it’s just part of the game. For example, during the 2021 bull run, Bitcoin took a few hits with drops of around 20-30%, only to bounce back and keep climbing. So, if we see such corrections in the future, I wouldn’t be too alarmed – it might just be Bitcoin doing what Bitcoin does best!

As an analyst, I frequently observe that such corrections serve to unsettle short-term traders, offering opportune moments for fresh investment. These instances, in turn, contribute to the momentum of the subsequent market surge.

In simple terms, since the market is currently experiencing a strong upward trend, it might benefit from a brief correction or dip. This would help alleviate some of the pressure in the market. Despite this, due to robust institutional investments via ETFs and steady retail interest, any potential fall should be temporary and not long-lasting.

The larger narrative—the growing adoption of Bitcoin as a mainstream asset—remains intact.

Alternative cryptocurrencies (altcoins) tend to imitate the movements of Bitcoin, yet they possess unique behaviors of their own. In the event of a sudden Bitcoin price drop known as a “flash crash,” altcoins may face an even steeper downturn.

Altcoins tend to experience less trading activity (lower liquidity) and greater price fluctuations (higher volatility) than Bitcoin. These dips can signal the start of an ‘altseason’, a phase where altcoins typically show larger percentage increases compared to Bitcoin.

It’s not uncommon to hear the concept of an extended period of altcoin price surges, often referred to as ‘altseasons’. Historically, we’ve seen altcoins gain momentum following periods when Bitcoin’s influence lessens or experiences stability in the market.

In the early part of 2021, Bitcoin hit a record peak of $64,000 in April. Later on, its influence or control decreased significantly, falling from more than 60% to less than 50%.

This transition sparked an enormous surge in the value of various alternative cryptocurrencies, including Ethereum (ETH), Binance Coin (BNB), and numerous lesser-known ones, which reached all-time price peaks during the subsequent months.

It’s possible that we might see a similar trend recurring. At the moment, Bitcoin holds significant influence, strengthened by institutional interest and the focus on ETF proposals.

When Bitcoin reaches and maintains a value over $100,000, investors might begin transferring their profits into other cryptocurrencies (altcoins), potentially igniting fresh expansion across the entire crypto market.

Even though enthusiasm runs high, it’s crucial to remember that the risks remain very much present. The unpredictable nature of the cryptocurrency market means significant fluctuations can occur, emphasizing the importance of a cautious, informed strategy.

If you’re considering Bitcoin or delving into other cryptocurrencies, the upcoming period might present chances for profit – but always trade prudently and remember not to risk more money than you’re prepared to part with.

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2024-11-21 19:53