Bitcoin: Halving Effect, Spot ETF Boost, Price to Challenge All-Time High Again?

Bitcoin: Halving Effect, Spot ETF Boost, Price to Challenge All-Time High Again?The price movement of Bitcoin has been closely watched since the fourth Bitcoin halving earlier this year. Investors are closely observing whether the historical cycle will repeat itself, hoping for a price surge after a long period of consolidation

Bitcoin: Halving Effect, Spot ETF Boost, Price to Challenge All-Time High Again?

The price movement of Bitcoin has been closely watched since the fourth Bitcoin halving earlier this year. Investors are closely observing whether the historical cycle will repeat itself, hoping for a price surge after a long period of consolidation. HashdexResearch predicts that Bitcoin is currently in a crucial phase, with a potential for a price breakthrough soon.

Impact of the Halving Effect:

Halving refers to the mechanism in the Bitcoin network where the mining reward is halved every four years, aiming to control Bitcoin's supply. Historical data shows that halving events have often driven Bitcoin prices upwards. Research reports from HashdexResearch indicate that the trend of price increase after halving may reemerge.

Supporting Macro Environment:

In addition to the halving effect, some recent macro factors may also fuel Bitcoin's price growth:

• Major Central Bank Rate Cuts: The Federal Reserve's decision to cut interest rates by 50 basis points in mid-September, along with monetary easing and stimulus measures from other central banks, has created a more favorable environment for risky assets, including Bitcoin.

• Upcoming US Presidential Election: Expectations and uncertainties surrounding the US presidential election could intensify market volatility and potentially push investors towards safe-haven assets like Bitcoin.

Stability and Expected Volatility in the Third Quarter:

The cryptocurrency market experienced relatively stable volatility at the end of the third quarter, with Bitcoin's volatility remaining below 50%, indicating a gradual maturity of the industry. However, as the fourth quarter of 2024 begins, especially when price begins to show positive fluctuations, the overall volatility of cryptocurrencies is expected to increase.

Bitcoin's Performance in the Third Quarter:

Bitcoin showed a positive performance in the early stages of the third quarter of 2024, rising by 5.3% in July. Factors contributing to this rise include:

• Optimism around Ethereum ETFs: Growing optimism surrounding the potential approval of Ethereum ETFs boosted confidence in the entire cryptocurrency market.

• Trump's Election Prospects: Investors' renewed confidence in the election prospects of Trump, who is supportive of cryptocurrencies, also propelled Bitcoin prices upwards.

However, the Bank of Japan's unexpected interest rate hike in August led to widespread sell-offs across major asset classes, impacting Bitcoin and causing a 10% decline. In September, market sentiment weakened due to decreasing confidence in Trump's victory and US employment data hinting at a potential recession, leading to a subdued performance for Bitcoin.

Fortunately, the Federal Reserve's interest rate cut in mid-September sparked investor optimism, helping Bitcoin recover. Bitcoin ended the month with an 8% gain, resulting in a total return of 2.5% for the third quarter.

The Driving Force of Spot Bitcoin ETFs:

The launch of spot Bitcoin ETFs, particularly with the participation of global investment management giant BlackRock, holds significant importance in the crypto space. In January, BlackRock launched a spot Bitcoin ETF, pushing the price of this cryptocurrency to a new all-time high. In July, BlackRock introduced a spot Ethereum ETF.

Larry Fink, CEO of BlackRock, views Bitcoin as an asset class, comparing its investment potential to gold. He believes Bitcoin is an alternative to commodities like gold and points out that the future success of digital assets will depend not solely on regulation but also on liquidity and transparency.

Spiking Inflows into Spot Bitcoin ETFs:

On October 14th, spot Bitcoin ETFs witnessed one of their strongest days since their launch in January. Data shows that spot Bitcoin ETFs attracted $555.9 million in new inflows on that day. BlackRock's own IBITETF attracted $79.5 million in inflows, second only to Fidelity's FBTC and Bitwise's BITB.

Conclusion:

Bitcoin is currently at a crucial juncture, with the halving effect, the macro environment, and the driving force of spot Bitcoin ETFs potentially propelling the price towards a new upswing. Investors are closely monitoring market dynamics, seeking to capitalize on this potential price surge. However, it's crucial to remember that the market is full of uncertainty, and investment decisions require caution.