The Bitcoin price has recovered somewhat over the past couple of weeks, bouncing significantly from the lows at around $15k.
As a consequence, a lot of investors and speculators in the space have become far more bullish as of late, particularly now that Bitcoin has once more established itself above the $20k threshold.
Speculators prepare for the Bitcoin halvening
With the Bitcoin halvening approaching in 2024, there are many speculators who believe that the halvening will have a significant impact on the price in the coming years, and that the halvening could be the most significant catalysts for future price appreciation moving forward.
On-chain analysts such as Plan B believe that the stock to flow model is the most important value drivers for Bitcoin, given that it means that the asset becomes twice as scarce in terms of the stock to flow every four years.
When the inflation rate is once more cut in half in 2024, this is expected to push the price significantly higher.
Both S&P and BTC will continue to go up, because governments and their central banks will continue to debase fiat currency .. but BTC will increase much faster than S&P (as it did in the last decade). pic.twitter.com/TapLqHX66K
— PlanB (@100trillionUSD) January 19, 2023
Inflation data is bullish
Inflation data released on Wednesday was lower than expected, which has pleased a lot of analysts who believe that the inflation rate may have now peaked and is coming down.
High inflation would have been a disaster, since inflation is a phenomenon that can completely ruin markets, and the fact that the worst of may be over (at least for the short term).
Another reason why the low inflation numbers are good news is because they give the Federal Reserve more room to manoeuvre on their policy of interest rate rises.
The rising interest rates of the past few months have made the cost of capital far higher, which has had a negative impact on asset prices, but pressure is mounting on Chairman Powell to reverse some of his decisions or to at the very least stall the rises.
Gemini enters chapter 11 bankruptcy
However, all is not clear for the Bitcoin markets, and there are still many reasons for why investors should not become overly optimistic just yet.
Gemini has now entered chapter 11 bankruptcy, which could, since the ramifications of this are that DCG may be force to wind down some of their operations, and in a worst case scenario could even be forced to sell some of the Bitcoin that is held in the Grayscale Trust.
The Grayscale Trust currently holdings 3% of all the Bitcoin in circulation, which means that the potential selling pressure from such a decision would likely cause huge problems for the price of Bitcoin moving forward.
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