Macro conditions, ETF optimism collide at the right time ahead of bitcoin halving

Analysts say the bull run for bitcoin is beginning

article-image

Ivan Popovych/Shutterstock modified by Blockworks

share

Cryptos extended their rally Friday as stocks traded sideways. Analysts say the bull run for bitcoin is beginning. 

Bitcoin was back in the green Friday after a slight dip Thursday. The largest crypto was trading around $43,700 at time of publication after briefly surpassing $44,000 yet again. 

Ether was trading mostly flat Friday, but maintained its monthly gains of nearly 25% over the past 30 days. As 2023 comes to a close, ether is up around 95% year-to-date. 

Equities posted mild gains, with the S&P 500 and Nasdaq Composite indexes gaining around 0.2% each midway through the trading session Friday. 

With bitcoin’s next halving slated for April 2024, coinciding with a potential policy shift from the Federal Reserve, investors may be in for the perfect storm Thomas Perfumo, head of strategy at Kraken, said. 

Read more: Bitcoin flirts with breakout, price mirrors lead-up to 2012 halving

“This is going to be the fourth halving and pretty much every single one has kicked off a bull cycle where the top has come in about 18 months or so after the halving event,” Perfumo said. 

“This halving is special in the sense that you’re going to have inflation in bitcoin’s circulating supply drop below 1% for the first time in history,” he added. “That’s basically crossing that threshold that gold has historically served as this kind of bellwether-sound currency where the supply growth of gold is something that’s been north of 1%, but very steady and very low single-digits.” 

The catalyst for the rally, which has seen both bitcoin gain more than 56% since the start of October 2023, was optimism about a bitcoin exchange-traded fund finally hitting the market in the US, Luke Nolan, research associate at CoinShares, said. 

“People [are] frontrunning what they believe will be significant flows stemming from the potential launches of the ETFs,” Nolan said. “If the SEC approves a spot bitcoin ETF, there is a ‘stamp of approval’ for the asset class from the largest capital market regulator in the world.” 

As traders wait anxiously for the first ETFs to hit the market, Perfumo said the rally for spot bitcoin prices shouldn’t stop there. 

Read more: Lucky 13? Where spot bitcoin ETF proposals stand ahead of judgment day

“That’s positive for prices, generally speaking,” Perfumo said. “What I mean by that is one of the biggest barriers for the US specifically when it comes to investment has been the accessibility of crypto in retirement accounts. Having crypto in a securitized format via an ETF, which is a very commonly understood product nowadays, even by consumer investors, I think that’s a really powerful statement.” 

JTO, the governance token for Solana-based staking project Jito, made its debut via an airdrop Thursday. Close to $110 million was up for grabs when the airdrop hit Thursday morning, and by Friday, JTO was trading more than 180% higher than its initial price of $1.20. 

Solana (SOL) apparently riding the JTO wave, posted gains Friday as well, up more than 11% over the past 24 hours at time of publication. 

“If history repeats itself, what you tend to see is the smart contract platforms pick up and then the dapps and whatnot that are subject to higher levels of volatility — because they’re smaller assets in general — tend to follow,” Perfumo said. “I can definitely see a situation where Bitcoin leads into a cycle for Ethereum, Solana and some of the other alts.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit