DeVere CEO Believes Bitcoin Price Started To Grow Due To A Crypto ETF And The Lightning Network
After being in a bear market for more than a year, the most popular virtual currency, Bitcoin (BTC), registered a very positive day candle a few days ago. Back on Friday, Bitcoin grew around $350 increasing the positive sentiment in the market towards this digital asset.
According to the CEO of the independent financial consultancy firm, deVere Group, Nigel Green, there are some reasons that helped Bitcoin price grow. He mentioned that this could be the first move before starting a considerable Bitcoin surge in the near future.
Back in November 2018, Bitcoin dropped under $6,000 for the first time in months. This was something very bearish that triggered a harder drop down to $3,250. Due to this situation, several firms and crypto-related companies started to take extreme actions such as reducing the number of employees.
Due to the fact that there are some positive things coming ahead, Bitcoin could recover the growth path and start increasing in price once again. In a recent article released by deVere group, Nigel Green provides an explanation about why Bitcoin is going to be growing.
Although he says that investors should not be popping champagne corks yet, he believes that there are three likely drivers of Bitcoin’s price spike. The first one is related to the potential approval of a Bitcoin ETF.
The U.S. Securities and Exchange Commission (SEC) has been analyzing the possibility to accept a Bitcoin ETF proposal. However, they’ve rejected several ETFs in the past, including one proposed by the Winklevoss twins.
A few days ago, a Commissioner at the SEC mentioned that the approval of a Bitcoin ETF will happen sooner or later. This is very positive for the space because it will give the opportunity to traditional investors to have exposure to the cryptocurrency market.
The second thing that he mentioned is related to the Lightning Network (LN). This is an off-chain layer solution to solve the scalability problems that Bitcoin faces. Back in 2017 when Bitcoin was reaching its highest price ever registered, the network was completely congested. Because of this situation, each transaction could take several hours to be processed. Additionally, the fees to make a simple transaction increased exponentially up to $55 in some cases.
With the LN, Bitcoin will be able to process hundreds of thousands of transactions per second (TPS). According to Green, the development of the LN will allow Bitcoin to move towards mass adoption. During the last year, the LN has been growing at very fast rates. At the time of writing this article, the LN has 6,169 nodes, 24,632 channels and a capacity of 659 BTC ($2.38 million).
The third thing that he said that triggered this growth in the market is related to the 2020 halving. Bitcoin rewards for miners drop 50 percent every four years. This allows the supply of Bitcoin to grow at a lower rate. About this, he mentioned:
“The code for mining Bitcoin halves around every four years and the next one is set for May 2020. When the code halves, miners receive 50 percent fewer coins every few minutes. History shows that there is typically a considerable Bitcoin surge resulting from halving events.”
Experts believe that with a supply reduction and an increase in the demand, the price of the most popular digital asset would grow and eventually reach new highs.
At the time of writing this article, each Bitcoin can be purchased for $3,640 and it has a market capitalization of $63.83 billion.