Experts explain the drivers of Bitcoin’s rally

Bitcoin prices will rise amid a rising network hash rate and investor optimism regarding the recovery of the US economy. ForkLog said, citing experts surveyed.

In particular, the rising mining difficulty as a driver of the price was cited by Mike Lvov, head of PR and communications at EMCD.

Also, according to him, investor hopes are being fueled by forthcoming regulatory changes in the industry.

«Even though tougher regulation will lead to additional restrictions for both cryptocurrency users and businesses, overall it provides favourable ground for inflows of institutional capital», — said Lvov.

Regional director of CommEX in the RF and the CIS, Anton Toropcev, believes that data on the slowdown in inflation in the United States played a role in the current price movement.

Moreover, the trigger is the anticipation of a forthcoming SEC approval of a Bitcoin ETF — January 2024 approaches the deadline for ruling on several applications.

«As the US dollar weakens and Middle East instability persists, investors are rebalancing their portfolios to preserve value. Some capital flows into gold, some into digital gold, which Bitcoin is traditionally considered», — explained Toropcev.

Macro factors are reinforced by the overall positive mood in the crypto market linked to the upcoming Bitcoin halving in 2024, adds the expert. Moreover, the weeks between Thanksgiving and Christmas have historically been favourable for Bitcoin (the so-called Santa Claus rally).

«During December, Bitcoin has every chance to test the $45,000 level, but the main rally is unlikely to start before 2024», — noted Toropcev.

Earlier, Blockstream CEO Adam Back forecast Bitcoin to reach $100 000 in the coming months.