Bitcoin price crosses psychological milestone of $42,000, and wild forecasts arise.

The price of Bitcoin crossed the psychological barrier of $42,000, signifying the start of a new crypto super cycle that is expected to boost the price of Bitcoin past $500,000. Crypto enthusiasts are hailing it as a new monetary system that will devastate Wall Street. 

The cryptocurrency world is in a frenzy right now, with Bitcoin enjoying its third month of gains, adding another 11% to its gains so far in December to trade at its highest level since the industry began to burst in April 2022.

All of the euphoria around the increase has resulted in inflated projections of future gains, most of which are based on intuition or hazy technical analysis. This year has seen a spike in the popularity of cryptocurrencies. They have increased by more than 150% so far in 2023, as many market experts expect Bitcoin exchange traded-fund (ETF) trading to be legalized by US exchange regulators shortly.

Because of the enthusiasm, Coinbase CEO Brian Armstrong said that Bitcoin may be the key to spreading Western culture. 

Meanwhile, projections for how high the coin may go varied from $50,000 in the immediate term to more than $530,000 in the long run. "Things are heating up again. Comments like those demonstrate how fast sentiment for this asset class can shift," said Matt Maley, chief market strategist at Miller Tabak & Co, according to Bloomberg on Tuesday (5/12/2023).

Maley contends that one of the primary reasons Bitcoin surged so high in 2020 and 2021 was the large injection of money into the economy as a result of the pandemic. 

He adds that without a big liquidity program, some of the high Bitcoin price estimates are merely a pipe dream. A US Bitcoin-based ETF has long been anticipated, with the hope that such a product would make it easier for money managers to acquire it for clients, potentially leading to billions of dollars in new investments.

"Since mid-October, we have observed noticeable changes in the market driven by growing institutional enthusiasm towards the possible approval of a spot BTC ETF, and more recently, an improving macro environment," the researchers stated in a note. According to Kaiko researchers' data, crypto investment products have experienced recent inflows, and daily spot trading volumes in November reached a seven-month high. 

It's not uncommon for speculation of a larger crypto surge to spread like wildfire on X (Twitter). There is a lot of crypto discussion there, and crypto aficionados are infamous for uploading memes that mock non-believers. 

However, Bitcoin has gone through several hype cycles in recent years, with increases applauded despite the fact that the currency still needs to rise another 65% from present levels to reach its all-time high of roughly US$69,000 in 2021. Previous attempts have failed, with Bitcoin dropping 64% last year after climbing 60% in 2021.

This did not deter crypto aficionados from celebrating the recovery. Another crypto enthusiast's viewpoint reiterates the oft-repeated - and much refuted - notion that cryptocurrencies may be a quality asset, which means they can be a safe haven in stormy times.

"Another speculative frenzy is the combination of ETF speculation and hopes for rate cuts." Are those who have been waiting for an ETF and have lost out on a US$20,000 surge going to pay twice as much just because it's an ETF? "Unlikely," according to Michael O'Rourke, chief market strategist at JonesTrading. He went on to say that the asset is just speculative gaming, and that in its 14 years of existence, it has served no purpose other than speculation and unlawful money transfers.