In recent years, Exchange Traded Funds (ETFs) have emerged as a key topic, particularly due to their potential to stimulate economic growth. The price of Bitcoin (BTC), the world’s leading cryptocurrency, is expected to surpass its previous all-time high (ATH) of nearly $70,000. BTC advocates are optimistic that the upcoming halving event in April 2024 will further boost its value.
Bitcoin’s bullish momentum has been attributed to significant inflows of funds into the global cryptocurrency market. This has been driven by the long-awaited approval of spot ETFs for Bitcoin in the United States. These approvals have attracted billions of dollars from institutional investors, contributing to Bitcoin’s upward trend.
Despite some volatility, Bitcoin’s resilience and increasing interest from institutional investors have fueled optimism among investors. The Securities and Exchange Commission (SEC) has approved 11 spot BTC ETFs, with the top 10 actively traded stocks attracting significant investments. This is a testament to the data-driven research of K33 Data Research, which has identified nine new spot ETFs for Bitcoin.
The U.S. ETF industry now manages over 300,000 BTC, worth over $17 billion, representing approximately 1.5% of the total 19.6 million BTC currently in circulation. Grayscale, a leading cryptocurrency asset management firm, has around $27.61 billion worth of BTC, with the recent approval of spot ETFs by the SEC. This brings the total worth of cryptocurrency held by these entities to approximately $43 billion, excluding Grayscale’s holdings in its Bitcoin Trust (GBTC), which has now been transformed into a spot ETF following SEC approval.
Other factors, such as increasing demand from fund managers and investors, have also contributed to Bitcoin’s solid performance. BlackRock, the world’s largest fund manager with over $7 billion in assets under management, is among the latest batch of BTC ETF operators. The iShares Bitcoin Trust (IBIT) has become increasingly popular, with trading volume reaching a record high of 96 million shares in February, nearly double the previous record of 43 million shares in February 27.
ETFs provide investors with access to Bitcoin in a safe and controlled manner, attracting more interest and investments in the cryptocurrency space. However, skeptics raise concerns about the potential volatility and speculation that could result from the introduction of BTC ETFs, as well as issues of market manipulation and lack of oversight.
The halving of Bitcoin’s supply, which occurs every four to five years, has historically had a significant impact on its price. Following the 2012 halving, BTC’s price increased by 80-fold, and after the 2016 halving, it witnessed a 300% rise. The most recent halving in 2020 led to a 600% surge in BTC’s price. Many experts and analysts forecast a new ATH of at least $130,000 before the end of 2024, while others, like JPMorgan, expect a drop to $42,000.
The halving event serves to maintain Bitcoin’s scarcity and prevent excessive price inflation by reducing mining rewards. This reduction, along with the limited supply of 21 million BTC, aligns with its deflationary principles and further highlights its scarcity model.
As of writing, Bitcoin’s price stands at $62,413, with a market value of over $1.2 trillion. Whether the bullish predictions of analysts for a significant ATH in 2024 will come to fruition remains to be seen. Follow us on Google News for more updates.
