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ETF: Will Bitcoin Reach a New All-Time High in 2024?

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Exchange-traded funds (ETFs) have become a big topic, especially regarding their potential to fuel the price of Bitcoin (BTC) to surpass its previous all-time high (ATH) of nearly $70,000.

Furthermore, BTC supporters are optimistic that the next halving event scheduled for April 2024 will provide further momentum to the world’s flagship cryptocurrency.

The bullish momentum of Bitcoin

Bitcoin (BTC) reached its highest price since 2021 and approached its all-time high of $69,000 reached in November 2021, before undergoing a significant correction. The price remains comfortably above the $62,000 price zone at press time.

Bitcoin’s strong bullish momentum was primarily attributed to large fund inflows into the global cryptocurrency market, spurred by the long-awaited approval of spot exchange-traded funds (ETFs) for the orange coin in the United States.

These ETF approvals have attracted billions of dollars of institutional investment, contributing to Bitcoin’s strong bullish momentum.

Despite the volatility that followed, Bitcoin’s resilience and growing institutional interest fueled investor optimism.

Of the 11 spot Bitcoin ETFs approved by the Gary Gensler-led Securities and Exchange Commission (SEC) in January, 10 are actively trading and attracting significant inflows.

According to K33 data research, the nine newly approved spot Bitcoin exchange-traded funds (ETFs) in the United States now collectively manage more than 300,000 Bitcoin (BTC), valued at more than $17 billion at the time of publication. collection of data. This figure represents a new high for these funds, as they represent approximately 1.5% of the total 19.6 million BTC currently in circulation.

The latest data from the GBTC website reveals that Grayscale holds approximately 445,386.8454 BTC, valued at approximately $27.61 billion at the time of publication. Considering the combined holdings of the recently approved spot Bitcoin ETFs and Grayscale’s assets, the total value of cryptocurrency held by these entities amounts to approximately $43 billion.

Notably, the mentioned total does not include the holdings of Grayscale, which converted its long-standing Bitcoin Trust (GBTC) into a spot Bitcoin ETF following SEC approval. You might also like:

Bitcoin ETFs Fuel Investor Demand

While the debate over the impact of ETFs on the price of Bitcoin continues, other factors have also influenced the asset’s strong performance thus far.

A wide range of fund managers are rapidly acquiring the virtual currency in response to customer demand, as investors seek to buy ETF shares that reflect the underlying price of the asset.

Among the new group of Bitcoin ETF operators, BlackRock, the world’s largest fund manager, leads with assets under management exceeding $7 billion.

According to FactSet, trading volume for iShares Bitcoin Trust (IBIT) surged on February 28, with approximately 96 million shares traded, more than double its previous record of approximately 43 million shares set on February 27.

These ETF products have seen immense success as investors, previously unable to access Bitcoin in a secure and regulated manner, are now turning to this space.

Conversely, skeptics warn that the introduction of a Bitcoin ETF could exacerbate volatility and speculative trading, leading to unpredictable market dynamics. They cite concerns about market manipulation, lack of oversight and the risk of investor losses as reasons to proceed with caution.

Bitcoin Halving: a catalyst for a price surge

The Bitcoin halving, which occurs approximately every four years, has significantly influenced the price trajectory and market dynamics of Bitcoin over the years. During each BTC halving event, the reward for mining new blocks is halved, thereby reducing the influx of new coins into the market and impacting its supply.

Historically, Bitcoin halvings have heralded a substantial price rise. After the 2012 halving, the price of Bitcoin increased 80 times, while after the 2016 halving it saw a 300% increase. Notably, in the 16 months since the 2020 halving, the price of Bitcoin has soared more than 600%.

Many analysts and experts are optimistic about the potential of the upcoming halving to propel the price of Bitcoin to new all-time highs. Forecasts predict a rise of at least $130,000 by the end of 2024.

Not everyone agrees.

JPMorgan, for example, expects the price of Bitcoin to fall to $42,000 after the halving.

For those who don’t know, the halving serves to maintain the scarcity of Bitcoin and prevent excessive price inflation. By reducing mining rewards from 6.25 Bitcoins per block to 3.125 BTC, the halving further accentuates Bitcoin’s scarcity and aligns with its deflationary principles.

This scarcity-based model underpins Bitcoin’s controlled supply mechanism, ensuring that only 21 million BTC will be in circulation.

At the time of writing, Bitcoin is trading for $62,413, with a market cap of over $1.2 trillion. It remains to be seen whether analysts’ bullish predictions of a significant ATH for the global flagship crypto will come true in 2024.

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