Bitcoin is exchanging hands at $63,330.60 at the time of articulating this piece. The vertical rise of 10.845 in the last 24 hours is the center of attention, with several analysts quoting reasons, backing the further rise of the token in their own words. It brings BTC close to the previous ATH, setting the stage for the next ATH of $100k.
Pomp, a notable investor in the sphere, took to X to explain why the price skyrocketed in the last few weeks. For starters, he said that the rise is rare in the financial market since there has not been any obvious catalyst. This includes M&A activity and earning announcements. Next, Pomp attributed the significant rise to the launch of the Spot Bitcoin ETF.
It has been almost 45 days since the US Securities and Exchange Commission approved 11 applications. There was a phase of downfall when the token was at $40,000; however, it has bounced back pretty strongly to dance above the new resistance level of $60,000. The market recorded an inflow of $520 million in ETFs yesterday. This roughly translates to a 10x demand for the token compared to its production capacity.
Pomp called the demand imbalance mind-boggling. Cumulative net inflows in ETFs are valued at more than $6 billion. BlackRock alone holds $7.2 billion in assets, with five more ETFs having an AUM of at least $1 billion. Pomp further stated that investors were anticipating another bout of inflation. Hence, it is a diversion to Bitcoin to make better investment returns.
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Back in 2020, Pomp added, inflation was under 2%, and BTC was trading at $8,000. Two years later, the price bounced to $64,000 for an 8x surge amid the forward-looking approach by investors. Pomp said that investors saw inflation coming and began buying inflation-hedged assets in anticipation.
The current participation could be because investors anticipate another inflation phase. The media and the Fed have worked to celebrate the measures taken and reduce the rate. But, as he stated, the market lacks an honest evaluation of the situation. The current trend has set the stage to touch the value of $69,500 by the end of 2024, as per Bitcoin projections. There is a chance that it could end the year at $100,000, considering Bitcoin Halving is just around the corner.
Pomp addressed the fact that the current capital inflows were quantifiable and exceeded all expectations. While Wall Street continues to push BTC’s price up, it is best for holders not to fall into the trap of fast-selling the token. The upcoming inflation (anticipation) could see investors again turning to Bitcoin.
Finally, Pomp expects reflexivity to happen. Meaning, small investors kick off a trend, and followers push the prices further up by chasing the investment.
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The community has reacted to Pomp’s post, with members saying that smart money is piling into BTC. Others have sought Pomp’s reaction to the 5-year forward inflation market being quiescent.
