Bitcoin hit an 18-month high last week, while Solana’s market value is approaching USDC.

Bitcoin Surges to 18-Month Record High, Solana's Market Value Nears USDC

For most of this year, the chill of the crypto winter has been suffocating the enthusiasm and patience of investors, institutions, and project parties. Crypto winter is not a technical term; it is a word created by an industry that is still in development. It’s more like describing an atmosphere or mood. It is likely that someone drew inspiration from the famous TV show “Game of Thrones” and their motto: “Winter is coming.”

However, given Bitcoin’s (BTC) continued rise after cooling off last Friday and the optimistic outlook for the approval of Exchange Traded Funds (ETFs), Bitcoin (BTC) reached a new high in 18 months the day before, pushing the price of each Bitcoin (BTC) to $37,000. In the past seven days, Bitcoin (BTC) has risen nearly 8%, with a trading volume of $37,369, leading some to believe that the cold market environment may eventually ease.

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Many cryptocurrencies that followed the trend also saw gains, with Solana (SOL) leading the pack and continuing its seemingly unstoppable rebound. At one point last Friday, Solana was almost on par with USDC in terms of market value. Now, its price is well above $50 and around $54.54, with an increase of over 38% in the past week and 150% in the last 30 days. No other major coin or token has seen this level of returns, and analysts believe this phenomenon may be due to a short-term squeeze caused by short sellers closing their positions. Additionally, the fast and affordable SOL chain has attracted significant interest from major institutions. The second-largest cryptocurrency, Ethereum (ETH), is also showing excellent momentum, surpassing the $2,000 mark for the first time since July, with a gain of over 14% last week.

From various signs, it is clear that Bitcoin ETFs and the Bitcoin halving will undoubtedly be the main driving forces behind the next bull market for Bitcoin. The US wealth management industry may be the most accessible and direct market, where a new wealth effect is about to begin.

Galaxy estimates that the potential market size in the first year after the launch of a US Bitcoin ETF is approximately $14 trillion. They believe that due to accessibility reasons, the US wealth management industry may be the most accessible and direct market and will benefit the most from approved Bitcoin ETFs. As of October 2023, the total assets managed by broker-dealers ($27 trillion), banks ($11 trillion), and RIAs ($9 trillion) amount to a total of $48.3 trillion.

With the opening access to channels, the entry period of Bitcoin ETF in these segmented markets could last for several years. We assume that the RIA channel will grow from 50% in the first year and increase to 100% in the third year. For broker-dealers and banking channels, we assume a slower growth rate, starting at 25% in the first year and steadily increasing to 75% in the third year. Based on these assumptions, we estimate that the potential market size of the US spot Bitcoin ETF in the first year after launch is approximately $14 trillion, $26 trillion in the second year, and $39 trillion in the third year.

In the short term, research conducted by Bloomberg analysts shows a high probability of a Bitcoin ETF being approved in January next year. In conjunction with the current actions taken by the SEC, this has become the consensus among the majority of the market. The bullish sentiment in the cryptocurrency market remains strong, and the price of Bitcoin continues to receive support. In the long term, with the Federal Reserve’s interest rate hike cycle coming to an end or already ending, coupled with the upcoming Bitcoin halving in April, we can expect to see a major bull market in 2024.

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