After aiming for a new all-time high above $69,000, bitcoin (BTC-USD) has faltered and fell back below $63,000 on Tuesday. Yahoo Finance Brad Smith explains the three main factors affecting the price of bitcoin, especially after the cryptocurrency experienced a prolonged rally: spot bitcoin ETF listingsApril halving eventand crypto is on the ballot around the world this election season.
For more expert insights and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's Note: This article was written by Lucas Carberry Mogan.
Video transcript
JOSH LIPTON: Bitcoin is falling after briefly hitting a new high for the first time since November 2021, surpassing that $69,000 mark. Here with more information is Yahoo Finance's Brad Smith. Lace.
BRAD SMITH: Hi Josh, it's nice to see you. Look, viewers of market domination from day one and I am ready to dominate this Bitcoin success for you. First of all, we have to talk about the fact that Bitcoin is currently down 11%, having the worst day since November 2022.
Our own Jared Blikre pointed this out to us. And this is where you see some of that intraday activity that took place. Of course, the number that a lot of people should be focusing on, and rightly so, is that new record that we put out in November 2021. So, the new mark to beat and beat again is now $69,191 here.
And that's why we're going to continue to watch this closely. But if you're wondering, well, why did this steam come out of the engine here? Well, Bitwise Asset Management CIO Matt Hougan told us that what could prevent Bitcoin from recovering is if long-term Bitcoin investors decided to sell. The ETF and that market are absorbing more than 100% of the net new supply. So only when people who have held Bitcoin for six months, a year, two years, three years, if they decide to sell, will we be able to see the prices go back to where we are now.
Because he doesn't think ETF demand is going anywhere, Hougan explains. Holding $60,000 could be a key level to hold, with hopes of new support during the higher highs seen as Bitcoin has clearly emerged from this crypto winter here. So, here are the keys to the Bitcoin record we've seen so far and what's to come.
ETF applications and approvals. The anticipation of the Bitcoin halving in April. Plus, you have a global election year. Let me look at two and then we'll have a conversation about the last one.
First of all, the capitalization of the global crypto market. It was set today at $2.42 trillion, according to CoinMarketCap. Dinara co-founder and CEO Laurence Latimer told Yahoo Finance on Dec. 26, "We believe that by the end of 2025, $2.5 trillion is projected as an overall market capitalization."
So if you average that across the industry, we think there is another roughly 50% upside potential built into the asset price. That was in December, and Bitcoin was among them. Now think about ETFs and halving.
Ben McMillan, chief investment officer at IDX Advisor, said this morning: I think there is more breadth behind this particular rally this time around, making this milestone more significant. Panorama of buyers entering the market from outside through these ETFs. This is a much stronger tailwind than what we saw a couple of years ago with the all-time highs last time.
So at this point, about 95% of all Bitcoin that has already been mined is already in the ecosystem. That doesn't mean it won't have an impact. It's just, you know, potentially another thing that could be a catalyst as we move forward. So let's get back to basic economics. That will provide a small tailwind for prices to continue rising.
JULIE HYMAN: Brad, let's also talk about the role that global elections could play. You mentioned there that they could play a role. Dig a little deeper into that for us.
BRAD SMITH: Yes it's correct. And so we have over 60 countries heading to the polls this year in elections around the world. And there will be areas where cryptocurrencies, or Bitcoin, will surely be on the ballot. And we had the opportunity to talk to some people about this and the legislative actions and which regions could be instrumental in this.
And particularly here, we also received a comment from the co-founder of Chainlink who said: "I believe that the Asian markets, especially Hong Kong and Singapore, will be at the forefront of Bitcoin and digital currency adoption this year. This is mainly because the Regulators in those regions have more progressive and open-minded views towards digital assets, and seemed committed to making the region a leading jurisdiction for them."
He also continued to believe that in the Middle East, that will drive the next wave of adoption after Asia. I thank Sergey for those comments. And then we also had the opportunity to speak briefly with Ben McMillan about that matter. And it's really just going back to the number of people who will potentially see this as an inflation hedge and maybe vote for whoever is running a campaign that's a little more welcoming to cryptocurrencies here. And that includes the United States too.
JULIE HYMAN: Interesting. The Bitcoin-Powered Voter. I mean, Anthony Scaramucci told us yesterday that he believes another Biden presidency would be better for the crypto industry as a whole. We will see if people believe him at the polls, if that is his main motivation. Brad, thank you very much. I appreciate it.
