Historically, with the notable exception of ‘Black Thursday’ in 2020, March has been an uneventful month for cryptocurrencies. Yet, a lot has changed in 2021. Bitcoin (BTC) price shot above $60K on two separate occasions this March, and Ether (ETH) has made significant strides as well. Let’s take a look at the last 30 days in the life of BTC and ETH to see what factors influenced their behavior, as well as speculate on what may be coming as we move into a new month.
BTC began the month at around $47K facing some fairly strong headwinds the first few days of March in the shape of a widespread tech sell-off sparked by rising bond yields that tested all risk assets. The sell-off was short-lived with the bulls firmly back in control by March 9, as the yield market began to cool off. In fact, BTC went on to mark its all-time high above $61K by March 14.
Since then, we’ve seen a mixed bag from the number-one cryptocurrency which didn’t stay above the $60K barrier for long. Many analysts point to an inaccurate alert by South Korean blockchain analysis firm CryptoQuant about a huge impending whale dump on Gemini as the trigger for the correction. Others say that price corrections are expected and likely triggered by profit-taking around the psychological $60K level.
Either way, BTC rebounded once more and briefly reached above $60K again on March 20, trying its hardest to close out the month above $60K before falling back to around $58K on March 31 at the time of writing. So, what key events have affected BTC price this month?
Key Events in BTC in March
Apart from the rising yield in U.S. treasuries and a rebounding bond market which typically moves investors away from risk assets, most of the news surrounding BTC in March has been bullish. From the Goldman Sachs and Fidelity Bitcoin ETF filings to Tesla officially announcing that it now accepts payment for cars in BTC, is running its own node, and will be HODLing all the proceeds, March was anything but uneventful.
Tesla is using only internal & open source software & operates Bitcoin nodes directly.
Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency.
— Elon Musk (@elonmusk) March 24, 2021
We had more institutional players announcing moves into Bitcoin, with both Morgan Stanley and JPMorgan offering BTC funds to their wealthiest clients. High-profile Norwegian oil and gas giant Aker ASA revealed the creation of a cryptocurrency arm with an opening $59 million investment, and MicroStrategy’s Michael Saylor (and other bullish investors) continued to buy the dip.
We also saw a record $6 billion in BTC options expire that many believe will continue to send volatile shock waves through the market as we move into April. Yet, perhaps the most notable developments regarding Bitcoin fundamentals came during the last week of March, taking BTC from a low-point of near $50K to close to re-piercing the $60K barrier as payments giant PayPal announced that it would allow its U.S. customers to make purchases with crypto.
That wasn’t the only news to give the crypto markets a shot in the arm, as Visa announced its first settlement on the Ethereum blockchain using USDC; a massive development that could serve as the bellwether for mainstream acceptance of crypto-native payment methods. In addition to that, CME announced yesterday that it will be launching micro BTC futures sized at one-tenth of a BTC from May.
All these developments, added to record highs in hashrate, open interest, miner revenue, and increased announcements from institutions definitely suggest more bullish action on the horizon for the months ahead. Added to that the Fed’s announcement about maintaining a loose monetary policy and the passing of a $1.9 trillion stimulus bill, and we have a perfect storm for hard assets. So, where will BTC price go next?
Bloomberg Intelligence suggests that $400K at the end of the year is not an unrealistic target, while Stock-to-Flow proponent Plan B believes the bull run is just getting started. Trader and market analyst Michaël van de Poppe is looking at the nearer-term, calling for at least a $68K BTC in April — and a surge in altcoins as well. April is historically bullish for Bitcoin with only two bearish Aprils on record. Watch this space.
In many ways, the decentralized world computer and backbone of the growing DeFi economy, Ethereum, has had a tougher slog this month compared to BTC. A lot of the narrative in the first half of March surrounded Ethereum’s scaling issues with skyrocketing network fees and congestion problems.
Several competitors began flexing their muscles in the shape of Cardano, Solana, Algorand, Stellar, and Binance Smart Chain (BSC). In fact, Binance’s BNB became a top-three coin in February but was briefly ousted from the spot in March by Cardano’s ADA, touted by many to be an ‘Ethereum killer.’
ADA has since dropped several places down to fifth in the ranking since then, and, while there may be a lot of talk about toppling Ethereum, it’s just not that easy to hit network effect right off the bat. On-chain metrics suggest that competitors still have a very long way to go to catch up to Ethereum, which still has by far the largest developer community in the space, the most decentralized applications built on it, and is the enabler of the majority of DeFi projects and protocols.
Moreover, Ethereum began to address its scaling problems in earnest, with Vitalik Buterin himself admitting that scalability was an urgent issue. He said that the solution was coming soon in the form of rollups that will see the mighty blockchain through until its transition to Proof of Stake and ETH 2.0.
While ETH price didn’t recoup its all-time highs of above $2K set in February, it also rallied hard in keeping with BTC. And, with the news of Visa using its blockchain to settle payments, the rising NFT craze as Dapper Labs (the company behind CryptoKitties and NBA Topshot) raises $305 million from investors, and the increased popularity of DeFi ETH looks set to make another run at its $2K high any time now.
With the increased institutional interest in ETH, the upcoming Berlin hard fork in April which will go some ways to addressing high gas fees and making the Ethereum blockchain more robust, and increased announcements from Visa and other financial giants, ETH price looks set to have another record-breaking month in April.
The DGTX token, while still light years away from its all-time high and with a lot more to prove, has experienced its own rally in March, climbing back above 2 cents at its highest point on March 21, and ending the month up 222%. We have also more than doubled the number of new users on the exchange, increased liquidity, and tightened bid/ask spreads thanks to our new Liquidity Mining program on the exchange that pays you to trade, and made significant improvements to the UX/UI.
As we enter the second quarter of 2021, we look forward to more bullish developments. The launching of our zero-fee spot markets is our primary focus and we’ll be rolling out more key updates throughout the same period.
During that time, be sure to take advantage of the gains to be made during this bull market and its massive volatility by trading BTC and ETH futures zero-fee on Digitex–getting paid DGTX rewards while you trade.