- Bitcoin decreases 3.2% in the past 24 hours, dragging the cryptography market and triggering $ 1.15 billion in liquidations.
- Despite the drop, Chopping Han Xu predict The Haussier market of cryptography could enter a new average phase rather than an end.
- Han shared that the end of the quantitative tightening and the increase in m2 supply could fuel the growth of bitcoin.
Bitcoin (BTC) and the wider market of cryptography decreases on Friday at the start of the European session, with the upper crypto by market capitalization of 3.2% in the last 24 hours, alongside Ethereum (ETH) and Solana (soil), which drop 9% and 10%, respectively. Despite the decreases, Hashkey Capital’s partner Han Xu said the cryptographic bull’s market seemed to rise, with the next end of the quantitative tightening (QT) and the increase in M2 supply reporting a potential return to an upward action.
Bitcoin, altcoins plunge in the middle of the expert prediction of positive macroeconomic changes
Bitcoin decreases briefly below $ 104,000 for the first time in the last seven days, which has slid its high -level colleagues, Ethereum and Solana, to slide about 9% in the past 24 hours. The decline triggers $ 1.15 billion in cryptographic term liquidations.
Despite the recent fears that the Haussier market does not stop, Han Xu, associated with Hashkey Capital, expressed his confidence that the Haussier market always has an important place to function, declaring that the current phase is a “new average phase with a substantial increase still in advance”.
In an exclusive interview with FXSTREET, Han highlighted macroeconomic trends and chain data as key indicators that could renew positive feeling in the crypto.
He quoted that the reforms of the additional lever ratio (SLR) and a projected end of the quantitative tightening later this year could mark a turning point in the liquidity cycle of the dollar. Han pointed out that the end of QT represents a central moment for the crypto, because it signals an overthrow under the conditions of global liquidity.
“Once the QT is ending – expected in the first half of 2025 – we plan a significant drop in real yields, which is historically correlated with risk behavior on traditional and digital asset markets. Cryptocurrencies, in particular, have disproportionate sensitivity to changes in global liquidity,” Han in FxStreet told FXSTREET.
“Over the past decade, the main digital active ingredients have shown betas above 8.5 in the world money supply, much higher than actions or raw materials. In other words, the crypto tends to respond more quickly and more aggressively when the liquidity returns,” he added.
The quantitative tightening (QT) implies that the Federal Reserve (Fed) reduced the money supply by shrinking its balance sheet by the sale of bonds, thus pushing higher interest rates. Meanwhile, the additional lever ratio (SLR) is a regulation that obliges banks to maintain 3% capital against their leverage exposure. Several market players expect regulators to meet the structure in the coming months, in particular with the American administration of President Donald Trump promoting deregulation to stimulate economic growth.
An end in QT and a potential softening of the SLR could release liquidity on the market and again stimulate the demand for risk assets.
By attacking Bitcoin prices growth, Han has recognized that the largely trendy objective of $ 1 million per BTC may appear beamous. However, he argued that he is rooted in the “logic of asset pricing and the monetary economy”. Han explained that Bitcoin is a highly inelastic asset concerning its supply, which reflects gold but “with even more stringent constraints”.
Bitcoin has a supply ceiling of 21 million BTC, with an inflation rate decreasing every four years via its half mechanism. Meanwhile, the growth of the global money supply of the M2 due to the continuing discharge of investors to seek a reliable store of value.
Consequently, the growing Bitcoin status as a digital organ is more firmly established with increased adoption and acquisition in business treasures, Han noted.
Us Spot Bitcoin Exchange Fund (ETF) has experienced enormous growth in the past year, their cumulative net inputs going to $ 45.31 billion within 17 months of launch, according to Sosovalue data.
Bitcoin benefits in corporate treasury bills have also skyrocketed to around 85.2 billion dollars, led by the strategy (formerly Microstrategy) and companies reproducing its play book, according to BitcoinTheries.
Han provides that Bitcoin’s market capitalization could correspond to that of negotiable gold (for example, golden bars, coins and ETF) during the next decade, which would make $ 1 million per high probability.
“The market capitalization of negotiable gold is estimated at approximately 25% of the total market value of gold, or approximately 5.6 billions of dollars. In a scenario of probable macroeconomic stagnation – similar to what we observed in the 1970s – real assets such as gold have experienced an annual growth rate (TCG) of 30%,” said Han.
“Assuming an annual increase in more conservative gold prices of 15% in the next decade, and that Bitcoin reaches the same market capitalization as negotiable gold, a price route to 1 million dollars per bitcoin by 2035 is not only possible – it is mathematically defensible.”
At the time of publication, Bitcoin is negotiated at $ 104,400, down 3% in the last 24 hours.
