ETFs

Is Now a Good Time to Buy Bitcoin ETFs on a Dip? – July 5, 2024

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Bitcoin cryptocurrency hit an all-time high of over $73,700 in March 2024, but has since been trading in a range of around $59,000 to $72,000. The cryptocurrency has fallen 11.4% in the past month, likely due to a stronger greenback.

The March record was achieved thanks to the approval and launch of bitcoin spot exchange-traded funds (ETFs) in the United States in January. According to a recent report from CCData, these ETFs have attracted net inflows of approximately $14.41 billion to date.

Bitcoin Halving Cycle Explained

Bitcoin has yet to reach the peak of its current appreciation cycle and is expected to surpass its all-time high this year, according to a CCData research report released Tuesday.

Bitcoin cycles refer to periods in which the digital currency reaches a new all-time high and then declines, entering a bear market or “crypto winter.” Three such cycles have occurred since Bitcoin’s inception, typically following a similar pattern around the halving event.

During a halving, Bitcoin miners’ rewards are cut in half, reducing the supply of new Bitcoins entering the market. The last halving event took place this year in April.

Historically, halvings result in a period of price increases that lasts about 366 to 548 days before creating a cycle top. Typically, each halving produces a longer cycle than the previous one as the asset class matures and volatility declines, according to CCData.

However, in the current cycle, Bitcoin has reached its last all-time high before the halving event, thanks to the launch of US ETFs. Historical expansion timelines are still in place, after the last halving.

Sideways Trading Expected for Bitcoin in Q3?

The CCData report noted that there was a decline in trading activity on centralized exchanges for nearly two months after the halving event in previous cycles. This trend is also noticeable in the current cycle. This suggests the possibility of further price expansion in 2025.

Analysts noted that institutional participation in the current cycle has changed previous trends. Weak trading activity is expected in the third quarter, indicating a larger sideways move for Bitcoin trading in the near term.

Despite the current sideways move, CCData believes that Bitcoin will surpass its previous all-time highs before the end of the year. The planned launch of an Ethereum ETF in the United States is expected to bring more capital, liquidity, and demand to the asset class (read: Bitcoin ETFs Expected to Surge on SEC Approval of Ether ETFs).

Focus on ETFs

ETFs like Bitcoin Trust in Grayscale (GBTC Quick QuoteGBTCFree report) , iShares Bitcoin Trust Fund (Quick Quote IBITI BITEFree report) , Fidelity Wise Origin Bitcoin Fund (Quick Quote FBTCFBTCFree report) , ProShares Bitcoin Strategy ETF (BITO Quick QuoteBITOFree report) , Bitcoin ETF ARK 21Actions (Quick quote from ARKBARKBFree report) And Bitwise Bitcoin Exchange Traded Fund (ETF) (BITB Quick QuoteBITBFree report) should be closely followed in light of the views of the above-mentioned analysts.

When will the cycle peak?

Thomas Perfumo, chief strategy officer at cryptocurrency exchange Kraken, told CNBC that market cycles typically peak 12 to 18 months after a Bitcoin halving. However, Perfumo was quick to point out that the current cycle has yet to see the same level of volatility or rapid run to all-time highs that previous peaks have seen.



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