Chances are you’ve heard a lot about Bitcoin in the last year. 2024 marks the approval of the first spot Bitcoin ETFs in the United States, a long wait for the cryptocurrency industry. The journey began in 2013 when the Winklevoss twins sent the first application for such an investment vehicle to the SEC. BTC reached an all-time high of $73,000, coinciding with inflows into the new ETFs, although skeptics argue that fundamentals underscore the cryptocurrency’s recent rise. At any rate, BlackRock’s financial product became the fastest-growing ETF in US history, reaching a value of $10 billion in just two months after its launch.
Binance data shows that as Bitcoin’s price hits record highs, attention is turning to the halving, which can play a role in its ascent. If demand remains constant or increases, the reduced supply could lead to a rise in the price of cryptocurrency. Investors are already taking advantage of the pre-halving discount. It’s a prime buying opportunity, so if you want to realize short-term profits, get acquainted with the fundamentals before you start trading. BTC is poised to have an even better 2024. It could hit $100,000 by the end of the year.
ETFs Saw Consecutive Negative Flows for The First Time in Their Lifespan
Catering to the needs of traders and risk-takers alike, ETFs don’t have an average life expectancy of more than one year. The Grayscale Bitcoin Trust recorded significant outflows in March, allegedly affected by moves from cryptocurrency lender Genesis. Needless to say, everyone is hoping for a return to business as usual. Genesis filed for bankruptcy in January 2023, freezing customers’ redemptions as early as November 2022 after the collapse of the cryptocurrency exchange FTX. Bitcoin’s recent price correction has generated hesitancy from investors, leading to lower inflows into ETFs. For every action, there’s an equal and opposite reaction.
People have noticed the price of Bitcoin has fallen and have decided to take a pause, so we’re slowly but surely approaching a dead zone for ETFs. In other words, the initial frenzy has ended, putting spot Bitcoin ETFs on course for a downturn. Even if it’s difficult to assign value to digital assets, the bull case for BTC can still be made. It’s time for investors who’ve joined the cryptocurrency space to demonstrate they’re in it for the long haul, not just to take profits. Despite how easy ETFs have made investing, it shouldn’t be something you do on a whim.
The Market Top Is a Long Way Away
AMBCrypto concluded that long-term Bitcoin holders were enjoying significant profits on their investments after having analyzed Glassnode’s net unrealized profit/loss metric. As a rule, any fall in the dormant supply predates volatility and price surges. For the time being, there’s no greed or euphoria to create overreactions; some have decided to hold off. The current scenario is characterized by a lack of retail participation and the anticipation of the halving event. There could be a trigger, but it’s nothing compared to the inflows in ETFs, which helped propel the price of the coin to a record high.
Intriguingly, accumulation didn’t slow down, which indicates a belief in BTC’s long-term price appreciation. As mentioned earlier, analysts and industry experts support the idea that Bitcoin’s long-term value could reach $100,000, attributable to regulatory changes and the impact of the halving. When it comes to predicting the potential future of cryptocurrency, it’s necessary to take into account market volatility, supply and demand dynamics, and global economic indicators.
Bitcoin Traders Must Keep an Eye on The Halving
The network update scheduled for April will contribute to the sustainability and long-term viability of the Bitcoin ecosystem. As there are only 21 million coins, the halving contributes to making the cryptocurrency scarcer, fostering a sense of rarity that could put pressure on prices. While some expect the halving event to lift Bitcoin, others believe the reality may be more complex. The prior bull rallies didn’t have ETFs in the equation, meaning the upcoming halving could be the most dramatic one yet. So, it’s recommended to add some exposure to your portfolio just in case gold doesn’t work out.
What Type of Investment Is Cryptocurrency, Anyway?
Even if the resources at your disposal might not be ideal, there’s no better time than now to start investing in Bitcoin. Many investors have diversified portfolios that include stocks, bonds, cash, and cryptocurrencies. The pre-halving period is a discounted period for BTC and all other coins. At the time of writing, Bitcoin has a market capitalization of $1,317.10 trillion, which more or less reflects its popularity. The digital asset’s price will likely increase and decrease over the following period. If past performance is any indicator of future results, the upcoming halving will trigger a price rally in the overall cryptocurrency ecosystem, adding to the inflation of the American economy.
Cryptocurrency is a speculative investment, so you purchase assets based on price fluctuations and hunches over solid fundamentals. Gary Gensler, the chair of the SEC, affirmed Bitcoin is a speculative store of value, failing to serve citizens in the same way as the dollar. Nevertheless, it’s important to remember that BTC is a unique asset class, so it can’t mimic widespread dollarization. By using strategic asset allocation, secure storage, and dollar-cost averaging, you can manage cryptocurrency investing. It’s just that it requires more knowledge and time but can result in high returns. Volatility is a natural part of market activity, often a hallmark of health within the cryptocurrency ecosystem.
With all the hype surrounding Bitcoin, it doesn’t come as a surprise that you’re tempted to buy. Investing in cryptocurrency is a personal decision, and if you do decide to do it, have a diversified portfolio of assets. BTC works in the same way it always had and will continue that way in the future. There’s no way of knowing for sure what will happen to Bitcoin or the broader cryptocurrency market. Still, BTC tends to surprise, so don’t be gloomy for no reason.
