The chief strategy officer of digital asset manager CoinShares says two factors are fueling Bitcoin’s (BTC) recent rallies.
In a new interview with Bloomberg Television, Meltem Demirors says BTC’s run-up since November is being primarily driven by two catalysts that few analysts saw coming.
According to Demirors, the first factor is the inflow of funds into publicly listed BTC miners which are enjoying increased fundamental strength.
“Number one, there’s been a tremendous inflow of capital into publicly listed Bitcoin miners, and Bitcoin miners are no longer just mining Bitcoin exclusively. We’ve got folks like Core Weave, Hut 8, and others getting into large language models for AI (artificial intelligence).
They’re running a bunch of GPUs (graphic processing units), they’re building data centers that are serving a wide range of high-performance computing, and at the end of the day, Bitcoin’s not the only ecosystem that requires mining, that requires chips, that requires data centers. So, I think there’s just been a wide availability of capital because of this AI narrative and because of the run-up in Bitcoin.”
The other factor driving Bitcoin, according to the Demirors, is the unexpected rise of BTC ordinals which are taking up a growing share of the top blockchain’s activity and generating large amounts of revenue for miners.
“And then the second big thing, we’re hitting all-time highs in terms of hash rate. There’s a lot of activity on top of Bitcoin. There are BTC tokens, similar to Ethereum ERC-20 tokens. We’ve got Bitcoin NFTs, which are called ordinals. I’m throwing a lot of lingo out here, but there’s been a ton of activity on Bitcoin. So, we’re seeing an all-time high hash rate on Bitcoin, a lot of computing directed at it, and fees for the first time in the history of the Bitcoin network, transaction fees are exceeding the block reward for Bitcoin miners, which is hugely promising in terms of future revenue streams.”
BTC is worth $42,724 at time of writing, up almost 60% since trading around $27,000 in early October 2023.
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