Lede

JPMorgan strategist Nikolaos Panigirtzoglou points to three reasons why Bitcoin has been surging recently: the banking crisis, the launch of bitcoin ordinals, and the upcoming halving event in 2024.

Summary

• The banking crisis has exposed the weaknesses of the traditional financial system and highlighted the benefits of the crypto ecosystem, such as deposits held in stablecoins that are 100% backed with high quality liquid assets, making them less susceptible to runs.
• The launch of bitcoin ordinals enables non-fungible tokens (NFTs) to be directly inscribed on the bitcoin network itself, without relying on smart contracts as seen with other blockchains. This could increase transaction fees and miners' revenue.
• In April 2024, bitcoin will be halved, as happens once every four years. This will double bitcoin's production cost to around $40k, creating a positive psychological effect as bitcoin's production cost has historically acted as an effective lower bound.