It's Back, Baby, Bitcoin Is Back, Back, Back

Just check the headlines: BTC exceeds $50k. Options traders bet $75,000. The Bitcoin market cap is again above $1 trillion. Bitcoin ETFs have amassed $11 billion since U.S. approval in January. Market mood indicator the Fear and Greed Index is in “extreme greed” area, its highest since BTC's September 2021 high. Bitcoin is a marketing meme.

Bitcoin dominates narratives, media attention, and institutional investor mindshare. Key initiatives like Solana {{SOL}} and Chainlink {{LINK}} are also increasing in value. But bitcoin dominates this market. Bitcoin "dominance," a measure of BTC cap against crypto, remains roughly 50%, making assertions that bitcoin would lose importance as crypto increased absurd. BTC fell below 35% in November 2022.

Naturally, Wall Street money into ETFs drives this. In 2023, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler delayed ETF certification, sparking market speculation. Bitcoin has benefited from being one of the few digital assets designated as non-security by regulators. Most other assets face regulatory uncertainty.

The April “halving” will halve bitcoin block mining payouts. Halvings have typically improved bitcoin's price, although 2020's was less beneficial than 2016 and 2012. Given that Bitcoin is becoming more useful and widespread, this year's halving might be more positive.

“Despite miner revenue challenges in the short term, fundamental on-chain activity and positive market structure updates make this halving different on a fundamental level,” crypto asset management Grayscale wrote last week. Bitcoin has long been called digital gold, but recent events imply it is becoming more important.”

Grayscale researcher Michael Zhao defines “fundamental on-chain activity” as Ordinal inscriptions and BRC-20 tokens, which let users to embed data (and art) on the Bitcoin blockchain, expanding its usage beyond digital gold. This action has earned almost $200 million in cumulative fees for miners, minimizing their misery when rewards are halved in April.

BRC-20 has divided the Bitcoin community into those who want to keep Bitcoin as a digital gold network for cheap monetary transactions (they hate higher transaction fees) and those who want to build new functionality on Bitcoin's blockchain, like OP_CAT and Drive Chains.

The involvement of the new Wall Street power players in this argument will be intriguing to observe in the coming months. Bitcoin is performing well as an open-source blockchain with hundreds of millions of users, from HODLers to financial institutions trading BTC-based derivatives. Not bad for a 15-year-old hobby project.

Keep coming back here for the most up-to-date information.