Cryptocurrency market capitalization leader Bitcoin is currently trading at R998,974 on Luno, approaching its all-time high of R1.04 million set during the 2021 bull market. The milestone followed a week-long rally in which Bitcoin rose about 20% in one week.
However, in USD terms, Bitcoin is currently trading around $52,000, which is still far from the dollar's all-time high of $65,000.
“This difference reflects the devaluation of the rand against the US dollar over the past five years and supports many proponents of Bitcoin's ability to act as a store of value,” said Christo de Wit, country manager for South Africa at Luno. It gives legitimacy to the debate.” ”
The performance of Bitcoin exchange-traded funds (ETFs), which have attracted more than $34 billion from investors since being approved by the U.S. Securities and Exchange Commission on January 10, has renewed investor confidence.
Amid the recent traditional market unrest caused by better-than-expected CPI inflation data in the US, Bitcoin's market capitalization (the sum of all Bitcoins in issue) surpassed $1 trillion yesterday. Several analysts expect growth to continue on the back of continued bullish momentum.
The influx of institutional money through ETFs is evidence of a positive shift in the way traditional investment institutions view cryptocurrencies.
“Another potential reason for the price increase is the Bitcoin halving, which is expected to occur in mid-April 2024. The Bitcoin reward paid to miners for each transaction will be cut in half, and its value will be further down the line. Historically, halvings have had a significant impact on prices,” says de Wit.
The first halving saw a price increase of over 8,000% from pre-halving levels. The value of Bitcoin also increased by about 3,000% during his second halving in 2016. The last halving of 2020 was followed by a bull run that ended at an all-time high of around $65,000.
De Witt pointed out that the dynamics of Luno have changed over the past two months, with altcoin Solana replacing XRP in third place behind Bitcoin and Ether. “XRP remains one of the top coins traded on Luno, but this could signal a new cycle or pattern in the crypto market,” he said.
