Since Bitcoin was approved for spot ETFs in January, its market behaviour has been somewhat erratic. After an initial surge of 70% following the approval, it lost steam and dropped by 14% by mid-March.
Despite these fluctuations, the long-term outlook for Bitcoin remains positive.
Historical Trends Suggest a Promising Future According to the Motley Fool, Bitcoin appears to be following a predictable four-year cycle that starts bearish, turns bullish in the final year, undergoes halving, and then reaches a cycle peak.
Currently, Bitcoin is in its third year after a bearish 2022 and a halving event this past April. Historical patterns suggest that Bitcoin typically rises by 125% in such a year, predicting a potential year-end price of $100,000 for 2024, up from an early-year price of $44,000.
If this trend continues, 2025 could see Bitcoin reaching as high as $500,000, following a typical post-halving surge of about 400%.
Market Dynamics Favor a Price Increase Coindesk notes that July has traditionally been a bullish month for Bitcoin, with significant ETF inflows and an average gain of 11% over the past decade.
The halving in April has reduced Bitcoin’s supply by 50%, which could lead to increased inflows into Bitcoin ETFs in the months to come.
Potential Fed Rate Cuts Could Further Boost Bitcoin A possible reduction in Federal Reserve rates by late 2024 might drive investors towards Bitcoin as an alternative to a weakening dollar, which tends to move inversely to Fed rate adjustments. Any reduction in rates would likely enhance risk-on sentiments and positively affect Bitcoin prices.
ETFs Worth Considering For those looking to increase their exposure to Bitcoin, here are a few ETFs that have shown promising performance:
- iShares Bitcoin Trust Registered (IBIT) has risen by 12.56% over the past month and 8.67% over three months.
- Grayscale Bitcoin Trust (GBTC) has advanced 14.03% in the past month and 8.41% over the last three months.
- Fidelity Wise Origin Bitcoin Fund (FBTC) has increased by 12.98% this past month and 8.64% in three months.
- ARK 21Shares Bitcoin ETF (ARKB) has matched IBIT’s performance with gains of 12.55% over the past month and 8.67% over three months.
- Bitwise Bitcoin ETF Trust (BITB) has seen a monthly gain of 12.56% and a three-month increase of 8.70%.
