Bitcoin Surges to $60,000: Is the Rally Sustainable or a Final Fling?
Bitcoin experienced a major surge this week, gaining 12,600 points and reaching a 25% increase. It also surpassed $63,000, coming within 10% of its all-time high of $69,000.
Can the cryptocurrency market continue to skyrocket, or is it simply overvalued? We can analyze this based on the financial and emotional aspects.
Financial Aspect: ETF Opens the Floodgates for Bitcoin Investments
Starting with the financial aspect, since the approval of the BTC ETF on January 11th, we have observed a constant increase in net inflows of funds. From the first week of outflows, we now see a daily net inflow of approximately $500 million. Traditional institutions have not lost interest in Bitcoin over time; in fact, they continue to provide a steady stream of buyers, turning the cryptocurrency market into an incremental market.
Emotional Aspect: Warm Sentiments, But Not Yet at the Peak
According to the “Shoeshine Boy Theory,” we can gauge whether Bitcoin is a hot topic worldwide by examining Google Trends and the ranking of Coinbase in the US App Store.
Using three sets of keywords – bitcoin, ETH, and Crypto – we can analyze the global search popularity. Undoubtedly, Bitcoin has the highest popularity, but it currently stands at 50, indicating that its popularity is only half of its peak.
Although the price of Bitcoin has been reaching new highs recently, the search popularity is only half of what it was on January 7th, suggesting that more users might enter the market.
Now let’s take a look at Coinbase’s ranking in the US App Store. It currently ranks 15th in the finance category and is not visible on the overall chart. When Bitcoin reached $69,000 in October 2021, Coinbase ranked first overall. Therefore, the emotional aspect has not yet reached its peak.
Despite the indications from the financial and emotional aspects that the market has not reached its peak, the recent violent price surge and high volatility in the short term make it advisable to refrain from using high leverage positions to avoid the risk of losing positions due to unchanged prices.
Weekly Highlights in the Cryptocurrency Market
Uniswap Plans to Distribute Protocol Fees to UNI Token Holders
The Uniswap Foundation announced that the “Uniswap Protocol Governance Activation” proposal will begin on March 8, 2024. This proposal suggests upgrading the protocol to incentivize UNI token holders who delegate and stake their tokens.
News Interpretation: This announcement is not only a huge positive for Uniswap but also for other DEX tokens. The overall sector experienced a 30% surge this week.
Pantera Capital Research Report: Bitcoin DeFi Ecosystem Could Reach $450 Billion
Cryptocurrency investment firm Pantera Capital recently released a research report stating that the total value of Bitcoin’s DeFi applications could reach $225 billion (25% of Bitcoin’s market value), accounting for 8% to 50% of Ethereum’s DeFi applications’ value. Over time, this total value is estimated to reach a maximum of $450 billion. Additionally, the top DeFi applications in the Bitcoin ecosystem could be valued between $6.5 billion and $40 billion, ultimately placing them among the top 10 most valuable assets in the cryptocurrency ecosystem.
News Interpretation: Currently, Bitcoin Layer 2 Merlin has a Total Value Locked (TVL) of $1.9 billion, which is roughly equal to the combined TVL of Polygon and Avalanche. The future of the Bitcoin ecosystem looks promising.
Arweave Releases Arweave AO Public Testnet, Mainnet Expected to Launch Within the Year
Arweave has unveiled the Arweave AO public testnet, which aims to support smart contracts and blockchain protocols with high scalability. Additionally, Arweave has disclosed its plan to launch the mainnet by 2024.
The viewpoints presented in this article represent diverse opinions and do not reflect the stance of “WEB3+”.
Editing by: Gao Jingyuan