The recent surge in Bitcoin (BTC) price could be the beginning of a new crypto supercycle that propels the world’s largest cryptocurrency to an astonishing $500,000. 

Enthusiasts believe that the recent surge in BTC price, which saw the leading cryptocurrency surpass $42,000, is indicative of a new monetary order that is captivating Wall Street and the digital-assets community, according to a Monday report from Bloomberg. 

The excitement surrounding Bitcoin’s rally has fueled optimistic predictions about its future gains. 

The prophecies for how high the coin could go spanned anywhere from $50,000 in the immediate term, to above $530,000, the report noted. 

“It’s getting crazy again. Those kinds of comments show just how quickly sentiment can change for this asset class,” said Matt Maley, chief market strategist at Miller Tabak & Co.

“I would argue that one of the most important reasons Bitcoin rallied so strongly in 2020 and 2021 was because of the massive influx of liquidity into the system due to the pandemic. Without another huge liquidity program, some of those predictions are a pipe dream.”

Market Participants Wait for ETF Approval

Bitcoin has experienced a remarkable revival in 2023, gaining over 150% so far this year. 

Market-watchers are eagerly anticipating the approval of a Bitcoin-based exchange-traded fund (ETF) in the United States, which could bring billions of dollars of new investments into the space.

The prospect of a BTC ETF has generated significant institutional enthusiasm and contributed to the shifting market dynamics observed since mid-October. 

According to Kaiko researchers, there has been a rise in crypto investment products and an uptick in daily spot-trading volumes, reaching a seven-month high in November. 

They claimed that the hope for a BTC ETF approval, combined with an improving macro environment, has fueled the recent market momentum.

While excitement about a broader crypto rally is spreading across social media platforms like X (formerly known as Twitter), it’s important to exercise caution. 

Bitcoin has experienced multiple hype cycles in recent years, with gains celebrated even as the coin continues to climb toward its 2021 all-time high of approximately $69,000. 

Past runs have ended with significant drops, as seen in the 64% decline in 2022 following a 60% gain in 2021.

Skeptics Remain Despite Soaring Prices

While the potential approval of a BTC ETF and the anticipation of interest rate cuts have fueled speculative frenzy, skepticism remains. 

Michael O’Rourke, the chief market strategist at JonesTrading, said that those who missed out on the $20,000 rally might not be willing to pay double for Bitcoin simply because it is associated with an ETF. 

He claimed that Bitcoin, in its 14-year existence, has primarily served as a speculative investment rather than demonstrating significant utility.

“The asset is purely speculative gambling and in the 14 years it has been around, it has not exhibited any true utility other than speculation and illicit money transfer.”