Bitcoin Value Approaches $70,000: Bloomberg and CryptoQuant Predict Ongoing Surge

The valuation of Bitcoin is on the verge of surpassing the $70,000 mark, and there are two driving forces that suggest this upward trend will persist and potentially exceed its historical peak of $73,815. In the week leading up to October 20, Bitcoin witnessed a climb of nearly 10%. Both Bloomberg and CryptoQuant have reported noteworthy insights concerning this surge in value.

Bloomberg has identified a significant capital inflow, with close to $2.4 billion entering Bitcoin spot ETFs over a recent six-day period, concluding on October 18. Based on past patterns, a surge in inflows at the beginning of 2024 played a key role in propelling Bitcoin to its record high on March 14, 2024, at $73,815. The current escalation in inflows is expected to similarly drive Bitcoin’s price to new heights, surpassing its previous record.

The forthcoming U.S. election on November 5 is believed to be swaying market sentiment, which Bloomberg suggests is reflected in the Bitcoin spot ETF inflows. The pro-Bitcoin stance of Republican candidate Donald Trump has fostered optimism about a potential relaxation of crypto regulations should he be elected. Conversely, the Democratic candidate Kamala Harris has indicated she would introduce tighter controls on cryptocurrency trade within the country.

A recent analysis by CryptoQuant indicates a strong bullish sentiment for Bitcoin, inspired by a record low in Bitcoin reserves held on exchanges as of October 18, 2024. CryptoQuant, which specializes in blockchain analytics, has recorded a reduction in these reserves from 3,065,330 BTC at the start of the year to 2,679,486 BTC on October 18. This equates to a significant drop of around 385,844 BTC, translating to approximately $26.5 million using the current Bitcoin price. Historical patterns suggest that such sharp declines in reserve levels are usually followed by a drastic uptick in Bitcoin’s valuation. Conversely, an uptick in exchange reserves often signifies imminent selling pressure.

Bitcoin reserves on exchanges denote the quantity of Bitcoin that is maintained on these platforms for the purpose of trading. In order to engage in trading, one must first transfer their Bitcoin from a personal wallet to the exchange, thus enabling them to sell it in the marketplace at will.

A reduction in Bitcoin reserve levels on exchanges insinuates that numerous investors are transferring their holdings to private wallets instead of preparing them for immediate sale, which often infers a collective anticipation of a price hike in the near future.

Bitcoin’s current ascent may benefit several sectors:

• Companies involved in Bitcoin mining such as Marathon Digital Holdings (NASDAQ:MARA) and Bitfarms Ltd. (NASDAQ:BITF) are positioned to benefit as they mine new Bitcoin.

• Cryptocurrency Exchanges: With heightened activity around the Bitcoin buzz, platforms such as Coinbase Global (NASDAQ:COIN), Binance, and Kraken could see increased revenues from heightened trading volumes.

• Manufacturers of semiconductors stand to gain from a rise in trades and mining operations requiring advanced chips, hence companies like Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD) may experience a surge in demand.

This commentary originally appeared on GuruFocus.