How will the Bitcoin Halving in 2024 affect your Bitcoin ETFs?
Bitcoin is gearing up for its fourth halving in mid-April 2024, and the excitement surrounding this event is palpable. It is not just a minor occurrence for crypto miners; it is a seismic shift that reverberates throughout the entire ecosystem. The anticipation extends beyond miners to encompass every aspect of the crypto world, including the burgeoning Bitcoin ETF sector.
Let’s delve into the specifics of this crucial moment and explore its implications for Bitcoin ETFs.
1. Bitcoin Halving: An Overview
Bitcoin halving is a significant event in the Bitcoin system that takes place approximately every four years. The upcoming halving, which will be the fourth in Bitcoin’s history, is expected to occur between April 19th and 21st, 2024. During a halving, the number of new Bitcoins that miners receive for processing transactions is halved. Currently, miners receive 6.25 Bitcoin per block, but after the upcoming halving, this will decrease to 3.125. This reduction in rewards is built into the Bitcoin protocol to control the supply of Bitcoin and ensure its scarcity, thereby making it a deflationary asset over time.
The impact of this event extends across the Bitcoin ecosystem, including the realm of Bitcoin ETFs.
2. Defining Bitcoin ETFs
Bitcoin Exchange-Traded Funds are investment funds that track the price of Bitcoin. They enable investors to gain exposure to Bitcoin without directly owning it.
There are two types of Bitcoin ETFs: Bitcoin Spot ETFs and Bitcoin Futures ETFs.
Bitcoin Spot ETFs hold actual Bitcoin and mirror its price movements.
Bitcoin Futures ETFs, on the other hand, invest in Bitcoin futures contracts, which are agreements to buy or sell Bitcoin at a predetermined price in the future.
Both types of ETFs allow investors to trade Bitcoin on traditional stock exchanges, providing liquidity and accessibility while reducing the risks associated with direct Bitcoin ownership.
3. The Impact of Bitcoin Halving on Bitcoin ETFs
The impact of Bitcoin halving on ETFs varies depending on their underlying assets and operational mechanisms.
For Spot ETFs, which directly hold Bitcoin, the halving event slows down the creation of new Bitcoin, potentially increasing scarcity and driving up the value of Bitcoin. As a result, spot ETFs may yield higher returns for investors.
Conversely, Futures ETFs, which deal in Bitcoin futures contracts, may experience indirect effects from the halving through shifts in market sentiment and price trends. However, the impact on Futures ETFs is expected to be less immediate and direct compared to Spot ETFs.
Given the likelihood of Spot ETFs being more affected in the short term, it is crucial to analyze the leading Bitcoin Spot ETFs to assess their current status.
4. Technical Analysis of Top Bitcoin Spot ETFs
The dominant players in the Bitcoin Spot ETF arena, including Grayscale (GBTC), BlackRock (IBIT), Fidelity (FBTC), Ark/21 Shares (ARKB), and Bitwise (BITB), have established their positions based on Asset Under Management.
Analyzing these top five Bitcoin Spot ETFs using indicators such as 20-Day MA, MACD 15 Period, Williams % Range 20 Days, RSI 20 Days, and Ultimate Oscillator reveals several intriguing insights.
Grayscale’s GBTC currently has a price of $56.38, which is below its 20-day moving average of $60.38. It exhibits a negative MACD of -4.74. The Williams % Range (20-days) sits at 55.66, while the Relative Strength Index and Ultimate Oscillator both stand at 49.
BlackRock’s IBIT is priced at $36.08, below its 20-day MA of $38.64, with a MACD of -3.04. The Williams % Range is notably higher at 88.43, while the RSI and Ultimate Oscillator both remain at 49.
Fidelity’s FBTC displays similar patterns, with a price of $55.36, below its 20-day MA of $59.29, and a MACD of -4.66. The Williams % Range is at 88.30, while the RSI and Ultimate Oscillator both stand at 49.
ARKB from ARK/21 Shares is priced at $63.31, below its 20-day MA of $67.80, with a negative MACD of -5.33. The Williams % Range is at 87.92, while the RSI and Ultimate Oscillator both register at 49.
Finally, Bitwise’s BITB is priced at $34.51, below its 20-day MA of $36.97, with a MACD of -2.92. The Williams % Range stands at 88.43. The RSI and Ultimate Oscillator both remain at 49.
In summary, all five top ETFs are currently trading below their 20-day moving averages, indicating short-term bearish trends. However, the Williams % Range suggests some variations in oversold conditions, while the MACD indicates negative momentum.
4.1. Predicting the Post-Bitcoin Halving Technical Status of Top Bitcoin Spot ETFs
After the Bitcoin halving, the technical landscape of these ETFs may undergo significant changes. The reduction in Bitcoin supply could alter price dynamics, which would affect their positions relative to the 20-day moving averages. Additionally, shifts in market sentiment following the halving may impact oversold conditions and negative momentum.
Endnote
As Bitcoin approaches its fourth halving, scheduled for mid-April 2024, the impact on Bitcoin ETFs remains a topic of intense interest. These halving events, which occur once every four years, not only adjust rewards for Bitcoin miners but also intricately shape the supply and scarcity dynamics of Bitcoin. Consequently, the value of Bitcoin ETFs, whether Spot or Futures, hangs in the balance, awaiting the outcome of this transformative event.
Tags: Bitcoin ETF, Bitcoin Halving