The Factors Driving Bitcoin’s Recent Rallies, According to CoinShares
The recent rallies in Bitcoin (BTC) are being fueled by two main factors, according to Meltem Demirors, the chief strategy officer of digital asset manager CoinShares. In an interview with Bloomberg Television, Demirors reveals that the first catalyst for BTC’s run-up is the influx of funds into publicly listed Bitcoin miners. These miners are expanding their operations beyond mining Bitcoin and are now venturing into areas such as AI language models and high-performance computing. This has attracted a wide availability of capital due to the AI narrative and the surge in Bitcoin’s value.
The second factor driving Bitcoin is the unexpected rise of BTC ordinals, which are tokens built on top of the Bitcoin blockchain. These ordinals, including BTC tokens and Bitcoin NFTs, are generating significant revenue for miners and contributing to an all-time high hash rate on the network. Furthermore, transaction fees on the Bitcoin network now exceed block rewards for miners, indicating promising future revenue streams.
Bitcoin’s Recent Performance
As of writing, BTC is valued at $42,724, marking a nearly 60% increase since its early October 2023 trading price of around $27,000.
Hot Take: The Driving Forces Behind Bitcoin’s Surge
The recent surge in Bitcoin’s price can be attributed to two key catalysts: the increased investment in publicly listed BTC miners and the growing activity and revenue generated by BTC ordinals. The expansion of Bitcoin mining operations into AI language models and high-performance computing has attracted significant capital inflow. Additionally, the rise of BTC ordinals, including tokens and NFTs built on top of the Bitcoin blockchain, has contributed to a record-high hash rate and transaction fees exceeding block rewards. These factors indicate a promising future for Bitcoin’s value and revenue potential.
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