Bitcoin
Is a $500K Bitcoin Rally Possible? Cryptocurrency ETFs to Consider
Since gaining approval for spot ETFs in early January, Bitcoin has been somewhat volatile, a trend that may concern some investors. The cryptocurrency surged 70% following approval, initially experiencing dramatic gains but then lost steam in mid-March, falling 14% since then.
However, despite recent volatility, Bitcoin’s outlook remains encouraging in both the short and long term.
Encouraging signs from historical patterns
According to Motley Fool, the digital asset is mirroring a historical pattern spanning four years, where it goes through a downtrend initially, followed by an uptrend in the final year. After witnessing a bear market, followed by a recovery in the second year and continued progress in the third, the cryptocurrency goes through the halving process, after which a cyclical peak is reached.
If we follow the pattern, Bitcoin has experienced a bear market in 2022, currently putting us in the third year with the halving taking place in April. While past performance is no guarantee of future outcome, we can speculate and leverage Bitcoin’s historical performance to gain insights into what 2025, the fourth year, may bring.
Using Past Patterns to Predict Bitcoin Price
In the third year, when the halving occurs, according to the Motley Fool, Bitcoin rises 125% on average, which puts the digital asset at a price point of $100,000 by the end of 2024, up from a starting price of $44,000 in 2024.
According to past trends, the digital asset increases dramatically by 400% on average in the year following a halving. If the trend repeats and Bitcoin ends this year in line with historical averages, its price could potentially reach around $500,000 by 2025.
Favorable changes in the supply and demand dynamics of digital currency increase the likelihood of price projections coming true.
Incoming avalanche
According to Coindesk, July has historically been a bullish month for the digital asset, with ETFs witnessing around $130 million in inflows on the first day of July. Over the past decade, Bitcoin has averaged over 11% gains in July, with 7 out of 10 months showing positive returns, according to the data.
With the cryptocurrency’s supply having reduced by 50% since its halving in April, we could see an increase in inflows into spot Bitcoin ETFs in the coming months.
Fed cuts rates to boost prices
If the Fed cuts rates in late 2024, investors may see Bitcoin as an alternative to the depreciating dollar, which moves inversely with the Fed’s interest rate adjustments. The increasing likelihood of the Fed cutting interest rates later this year, coupled with de-dollarization, tends to create opportunities in digital currencies.
The story continues
Furthermore, any Fed rate cut would boost risk sentiments, which in turn would help Bitcoin prices.
ETFs to consider
Below, we have mentioned a few ETFs for investors to increase their portfolio exposure to Bitcoin and capitalize on its long-term uptrend.
Registered iShares Bitcoin Trust IBIT increased 12.56% in the last month and 8.67% in the last three months.
Grayscale Bitcoin Background GBTC has gained 14.03% in the past month and 8.41% in the past three months.
Fidelity Wise Origin Bitcoin Fund FBTC has gained 12.98% in the last month and 8.64% in the last three months.
ARK 21Shares Bitcoin ETF ARKB has gained 12.55% in the last month and 8.67% in the last three months.
Bitwise Bitcoin ETF Investment Fund BITB has gained 12.56% in the last month and 8.70% in the last three months.
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Grayscale Bitcoin Trust ETF (GBTC): ETF Research Reports
iShares Bitcoin Trust (IBIT): ETF Research Reports
Fidelity Wise Origin Bitcoin Fund (FBTC): ETF Research Reports
ARK 21Shares Bitcoin ETF (ARKB): ETF Research Reports
Bitwise Bitcoin ETF (BITB): ETF Research Reports