Nasdaq hits all-time high, why is Bitcoin not moving?

Author: E. Johansson Source: DLNews Translation: Shan Ouba, Golden Finance

The Nasdaq Composite Index has been on a tear, hitting a record high for seven consecutive days. The Dow Jones Industrial Average and the S&P 500 have also hit similar highs, thanks to chipmaker Nvidia and the investment frenzy around artificial intelligence. However, Bitcoin has failed to keep up.

While market observers predict that the cryptocurrency could soar to $200,000 next year, it has remained stable around $65,000 over the past week.

Here are four factors holding back the top cryptocurrency.

Digesting the Halving

Bitcoin is just taking a breather after a strong start to the year. The Nasdaq may be up 18% so far this year, but Bitcoin is up 53%, McCarthy noted. That’s not just because Bitcoin tends to be more volatile — they just “move on different factors.”

Bitcoin had a very strong start to the year, helped by regulatory developments in the U.S. The next driver for Bitcoin will be the latest halving and the long-term impact of ETF demand.

The fourth halving, which took place in mid-April this year, cut in half the number of Bitcoins miners receive for maintaining the blockchain. Market participants expect a supply shock to drive prices higher as fewer Bitcoins are created. But the effects of a halving usually take months to show up, and are mostly visible when demand for Bitcoin is rising.

ETF demand in the U.S. could have a significant impact here as more advisors and firms onboard new investors in the coming months.

CCData research analyst Jacob Joseph agreed, saying that a once-in-four-year event is usually followed by a few months of quiet trading. Especially because the market was overheated in the months leading up to the halving. Central exchanges recorded new all-time highs in March, while speculation indicated by open interest “reached unprecedented levels. Open interest is an indicator that reflects the total number of open futures contracts. High open interest is often due to speculative frenzy. In this sense, the market needs the current cool-down period or price consolidation before seeing the typical rapid price extensions of Bitcoin and other digital assets. ETF Outflows Last week was the worst week for outflows from spot Bitcoin exchange-traded funds (ETFs) since March, amounting to $620 million. Short-term outflows from spot Bitcoin ETFs also contributed to the negative sentiment in the market, affecting the price action of the asset. However, the upcoming launch of the Ethereum ETF, coupled with recent positive macroeconomic data, suggests that Bitcoin and major crypto assets are likely to reverse their trend soon and aim for new cycle highs. style="text-align: left;">Mt. Gox

Once the world’s largest cryptocurrency exchange, Mt. Gox has been hanging over the industry since its collapse following a 2014 hack. The reason? Some $9.2 billion in Bitcoin was seized in bankruptcy, awaiting repayments to creditors.

Now it appears that those 142,000 Bitcoins could flood the market any time before October 31, Mt. Gox’s final repayment deadline, and the market may simply be waiting for those redemption events to occur.

“Massive Bitcoin redemption events are unlikely to occur,” David Duong, head of research at cryptocurrency exchange Coinbase, recently told DL News. “But concerns surrounding these repayments could still limit liquidity as market participants may avoid deploying new capital amid the uncertainty.” ”

Miners Selling Holdings

Bitcoin miners are also putting pressure on the price of the top cryptocurrency.

While the halving limits the number of new bitcoins that mining companies can create and sell, most of these companies still hold large reserves of the cryptocurrency. According to data from analytics firm CryptoQuant, the industry has sold about $300 million of its bitcoin reserves since the beginning of the year. And Marathon Digital, the largest publicly traded U.S. miner, sold more than $92 million in June alone - about 8% of its billion-dollar reserves.