Demirors, the chief strategy officer of CoinShares, believes that Bitcoin’s recent strong performance can be attributed to two main factors. Firstly, there has been a significant influx of capital into publicly listed Bitcoin miners. These miners are expanding their operations beyond solely mining Bitcoin and are venturing into areas such as AI language models. They are also utilizing graphic processing units and building data centers for high-performance computing. This expansion has attracted a wide availability of capital, driven by the narrative around AI and the overall rise in Bitcoin’s value.
Secondly, Demirors points to the increasing activity on the Bitcoin network, specifically the rise of BTC ordinals. These ordinals, similar to Ethereum ERC-20 tokens, and Bitcoin NFTs have gained traction and are contributing to the growth of the network. Additionally, Bitcoin is experiencing an all-time high hash rate, indicating significant computational power directed at the network. Furthermore, transaction fees on the Bitcoin network are exceeding the block rewards for miners, leading to promising future revenue streams.
As a result of these factors, Bitcoin’s price has surged to $42,724, representing a nearly 60% increase since early October 2023.