Janice R. Andrews
For investors in 2024, Bitcoin, the leading cryptocurrency, has been a wild journey. Bitcoin has been trading between roughly $59,000 and $72,000 after reaching an all-time high of over $73,700 in March. The strength of the US dollar is to blame for the most recent decline, which saw Bitcoin drop 11.4% over the previous month. Investors are asking if it’s time to purchase the dip in Bitcoin exchange-traded funds (ETFs) in light of these movements.
The Rise to an All-Time High
The authorization and introduction of spot Bitcoin ETFs in the US in January was a major factor in the rise to the record high in March. As of now, these ETFs have witnessed net inflows of about $14.41 billion, per a recent CCData analysis. The dynamics of the Bitcoin market have been significantly boosted by this inflow of capital.
Gaining Knowledge of the Bitcoin Halving Cycle
The halving cycle that Bitcoin runs on has a big effect on its price. These are cycles in which Bitcoin hits all-time highs before plunging into a bear market, which is popularly referred to as “crypto winter.” Three such cycles have been noted since the beginning of Bitcoin, all of which are intimately related to the halving occurrence.
A halving event reduces the amount of new Bitcoin that is available in the market by halving the reward for Bitcoin miners. The most recent halving took place in April of this year. Previous experience has shown that price increases occur between 366 and 548 days after a halving occurrence, culminating in a cycle peak. Each half cycle, according to CCData, usually lasts longer than the last as Bitcoin ages and becomes less volatile.
It’s interesting to note that in this cycle, the introduction of U.S. ETFs was a major factor in Bitcoin reaching its most recent record high before to the halving event. This irregularity suggests that the conventional cycle timetable may be changing.
Q3 Sideways Trading Is Anticipated
According to CCData’s analysis, trading activity on centralized exchanges decreased for almost two months following the halving of prior cycles—a pattern that is also evident in this one. This implies that in the third quarter of 2024, there may be sideways trading for Bitcoin.
Analysts point out that past tendencies have changed due to increased institutional engagement in the present cycle. Given the anticipated lack of trading activity in the near future, Bitcoin is likely to continue moving sideways. Despite this, CCData is still upbeat and believes that before the year is out, Bitcoin will surpass its prior all-time highs. The projected introduction of an Ethereum ETF in the US market is predicted to increase demand, capital, and liquidity even more.
ETFs Under Consideration
Given these market conditions, a few Bitcoin ETFs are worthwhile to keep an eye on. Among them are:
- Fidelity Wise Origin Bitcoin Fund (FBTC) – iShares Bitcoin Trust (IBIT) – Grayscale Bitcoin Trust (GBTC)
- ARK 21Shares Bitcoin ETF (ARKB) – Bitwise Bitcoin ETF Trust (BITB) – ProShares Bitcoin Strategy ETF (BITO)
Given the present market conditions and analyst projections, these ETFs should draw a sizable amount of investor interest.
When Will the Cycle’s Peak Occur?
The head of strategy at cryptocurrency exchange Kraken, Thomas Perfumo, states that market cycles usually reach their zenith 12 to 18 months following a Bitcoin halving. Perfumo points out that the current cycle hasn’t yet shown the same degree of volatility or quick climb to all-time highs as before peaks. This suggests a cycle that might be lengthier and more muted.
Final Thoughts
Investors are assessing whether this is the right moment to purchase Bitcoin ETFs at the dip because the price of bitcoin is currently declining and moving sideways. Potential for future gains is indicated by historical data and present trends, particularly with the anticipated launch of an Ethereum ETF. Even though the market might stay calm for the time being, the outlook for Bitcoin and related ETFs is still positive as the year goes on. As always, before making an investment, investors should do their research and give careful thought to the state of the market.
