In recent days, Bitcoin has been the center of attention in the cryptocurrency market, experiencing a 2.58% increase over the past week, as indicated by CoinMarketCap. This surge has seen the leading digital currency rise from around $37,800, nearing the significant $39,000 threshold.
This bullish trend has brought forth some notable achievements for Bitcoin, potentially stirring increased investor interest in the near future.
Bitcoin Hits Two-Year High in Investor Profitability
According to a recent update by blockchain analytics firm IntoTheBlock, a remarkable 81.35% of Bitcoin holders are currently in profit. This level of profitability is the highest for Bitcoin since December 2021, back when the cryptocurrency was trading above $50,000.
Key Factors Supporting Bitcoin's Price Rise
The current optimism in the Bitcoin market can be attributed to several factors. One of the most anticipated developments is the potential approval of a Bitcoin Spot exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC). Bloomberg analyst James Seyffart recently predicted that this approval could arrive between January 8 and January 10, 2024. The launch of a Spot ETF is expected to unlock massive institutional demand, possibly propelling Bitcoin’s value further.
Additionally, US Federal Reserve Chairman Jerome Powell's hints at a pause in rate hikes have also contributed to the positive sentiment. A halt in rate increases could benefit Bitcoin and other cryptocurrencies, as higher federal rates typically dampen investments in riskier assets like digital currencies.
Despite these favorable indicators, investors are reminded that the crypto market is influenced by various factors, and thorough research is advised before market engagement.
Bitcoin Network Sees a Significant Fee Reduction
In another positive development for Bitcoin, the network has witnessed a 50% reduction in total transaction fees over the last week. This decrease is mainly attributed to a drop in transactions related to the Ordinals protocol. Launched in January 2023, Ordinals facilitates the creation of non-fungible tokens (NFTs), known as BRC-20 tokens, on the Bitcoin blockchain. Similar to Ethereum's NFT dynamics, the increase or decrease in Ordinals activity directly impacts network fees.
As of now, Bitcoin is trading at $38,758, showing a slight 0.17% dip in the last hour. However, its daily trading volume has increased by 4.97%, reaching $20.37 billion.