Bitcoin ($BTC) is seeing a strong resurgence in demand after months of low activity. This uptick, along with other market trends, is boosting confidence in Bitcoin’s future growth.
As institutional interest rises and investors remain optimistic, many are wondering if Bitcoin is headed for new all-time highs.
Last week, Bitcoin’s demand spiked, with apparent demand increasing by 177,000 $BTC. This came just before a 5% price rally, pushing Bitcoin’s value up by 11% for the week.
According to data from CoinDesk Indices, Bitcoin is now outperforming other large cryptocurrencies, including those in the CoinDesk 20 (CD20) index, which rose by 9.6% in the same period.
CryptoQuant analysts, led by Julio Moreno, pointed out that Bitcoin has hit a ten-week high of $67,800, and there’s potential for even more growth.
“An expansion of apparent demand is necessary for bitcoin prices to rally sustainably to a new all-time high”, said Moreno.
He noted that past price rallies in 2020-2021 and earlier in 2024 were driven by demand peaks between 490,000 and 550,000 $BTC.
Supporting this rise in demand, US spot exchange-traded funds (ETFs) have seen large inflows of Bitcoin.
On average, around 9,000 $BTC flowed into these funds each day in the first quarter of 2024. BlackRock’s IBIT fund saw the largest inflow, with $393.4 million in just one day this week, according to data from SoSoValue. This institutional interest is seen as a strong factor pushing Bitcoin prices higher.
Institutional interest and market sentiment
Large investors, often referred to as “whales”, are also increasing their Bitcoin holdings. The total amount of Bitcoin held by these major players, excluding exchanges and mining pools, has risen to 670,000 $BTC.
This growth is a positive sign for the market, showing that big investors still have confidence in Bitcoin’s future.
Additionally, the futures market is becoming more active. The $BTC open interest weighted perpetual futures funding rate recently spiked to over 0.0136%, suggesting that more money is entering the market.
This increase in futures activity could lead to more volatility, but it’s also seen as a signal of strong market interest.
Investor sentiment remains positive, with Polymarket bettors now giving a 64% chance that Bitcoin will hit $70,000 in October. They also estimate a 75% chance that Bitcoin will reach a new all-time high in 2024.
This growing confidence has been reflected in rising prices for other cryptocurrencies too. For instance, Dogecoin ($DOGE) surged 5.8% this week, driven by news about Elon Musk’s political donations and his ongoing promotion of the Department of Government Efficiency (DOGE) initiative on X, his social media platform.
Broader crypto market and infrastructure growth
Bitcoin’s market dominance (BTC.D) has been rising too, now sitting at around 58.9%. This metric shows how much of the total cryptocurrency market is made up of Bitcoin.
A rising BTC.D suggests that Bitcoin is performing better than other cryptocurrencies, such as Ethereum ($ETH), Solana ($SOL), and Binance Coin ($BNB).
According to CoinGecko, the total crypto market value has grown from $2.26 trillion on 8 October to $2.41 trillion on 16 October. Most of this growth is due to Bitcoin’s strong performance.
While Bitcoin continues to dominate, the “2024 State of Crypto” report from a16z Crypto highlights other important trends in the broader market.
For example, the number of active crypto users has tripled since the end of 2023, reaching 220 million in September.
Much of this growth has come from Solana, which now has nearly 100 million active addresses. The report also shows that cryptocurrency is becoming more relevant in politics, especially in US swing states like Pennsylvania and Wisconsin, where interest in digital assets has surged.
Another key area of growth is stablecoins, which are digital currencies designed to maintain a stable value.
In the second quarter of 2024, stablecoins processed $8.5 trillion in transactions, far outpacing Visa’s $3.9 trillion.
As the infrastructure for cryptocurrencies improves, with innovations like Ethereum’s “Dencun” upgrade, transaction costs have dropped significantly, particularly for Layer 2 networks.
While Bitcoin is clearly leading the charge, the entire crypto ecosystem is evolving. Despite Bitcoin’s growing dominance, other cryptocurrencies and blockchain innovations also continue to push the industry forward.
