BitcoinBTC has surged into 2024, climbing as a closely-watched analyst identifies a surprise signal that hasn’t failed bitcoin and crypto traders since 2015.
The bitcoin price has rocketed towards $50,000 per bitcoin, nearing the 2024 peak bitcoin reached last month in the aftermath of the debut of a fleet of U.S. spot bitcoin exchange-traded funds (ETFs)—even as Federal Reserve chair Jerome Powell issues a stark warning.
Now, the bitcoin price is bracing for its looming scheduled supply cut, known as a halving, coming alongside the likes of Wall Street giants BlackRockBLK and Fidelity hoovering up huge amounts of bitcoin.
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“The new nine have amassed more than 200,000 bitcoin,” K33 Research analyst Vetle Lunde posted to X. That excludes bitcoin held by the converted GBTC bitcoin ETF managed by Grayscale, which holds almost 470,000 bitcoin.
“The light has turned green and the (investor) traffic has started moving,” Bundeep Singh Rangar, the chief executive of crypto investor Fineqia, said in emailed comments. “More drivers are joining the ETF roadway as their confidence grows in digital assets.”
Combined, those nine spot bitcoin ETFs—BlackRock, Fidelity, Bitwise, Ark 21Shares, InvescoIVZ, VanEck, Valkyrie, Franklin Templeton and WisdomTree—hold almost 1% of bitcoin’s total supply of 21 million bitcoin.
The spot bitcoin ETF managed by BlackRock, the world’s largest asset manager looking after around $10 trillion worth of client funds, now has around 80,000 bitcoin, worth $3.7 billion, while Fidelity’s spot bitcoin ETF is the second-highest with 68,000 bitcoin, worth $3.2 billion, according to Bitmex Research data.
Since their launch last month, BlackRock’s and Fidelity’s spot bitcoin ETFs have been winning business from Grayscale, in part due to their lower fees.
“An additional reason beyond fees is that the BlackRock and Fidelity ETFs are already commanding an advantage vs GBTC in terms of two liquidity metrics,” JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note to clients seen by Coindesk.
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The sudden growth of the U.S. spot bitcoin ETFs comes as bitcoin gears up for its next supply cut, which will see the number of new bitcoin awarded to those who maintain the bitcoin network, known as miners, cut by half.
“We are rapidly approaching the next bitcoin halving, set to occur in less than 80 days,” analysts at Ryze Labs’ wrote in emailed market commentary. “About 50 days before the halving, bitcoin typically begins a gradual ascent as traders anticipate the event. In both 2016 and 2020, bitcoin saw increases exceeding 70%.”
The bitcoin halving supply cut, the network’s fourth, will see the block reward fall from 6.25 bitcoin to 3.125 bitcoin in April.
“Despite miner revenue challenges in the short term, fundamental on-chain activity and positive market structure updates make this halving different on a fundamental level,” Michael Zhao, a researcher at Grayscale, wrote in a blog post.
“The continued adoption of bitcoin ETFs could significantly absorb sell pressure, potentially reshaping bitcoin’s market structure by providing a new, steady demand source, which is positive to price.”
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