As Bitcoin gears up for its fourth halving in mid-April 2024, the anticipation is electrifying. This event isn’t just another blip for crypto miners; it’s a seismic shift resonating throughout the ecosystem. The buzz isn’t merely about miners; it’s about how this event impacts every corner of the crypto world, including the growing Bitcoin ETF sector.
Let’s dive into the details of this pivotal moment and uncover what it means for Bitcoin ETFs.
1. Bitcoin Halving: The Basics
Bitcoin halving is a special event in the Bitcoin system, which happens roughly every four years. The next halving, the fourth in Bitcoin’s history, is expected to occur around April 19th to 21st, 2024. During a halving, the number of new Bitcoins miners receive for processing transactions is cut in half. Currently, miners get 6.25 Bitcoin per block, but after the upcoming halving, it will reduce to 3.125. This reduction in rewards is built into the Bitcoin protocol to control its supply and ensure scarcity, making Bitcoin a deflationary asset over time.
The impact of this event extends across the Bitcoin ecosystem, including the realm of Bitcoin ETFs.
2. Bitcoin ETFs Defined
Bitcoin Exchange-Traded Funds are investment funds that track the price of Bitcoin. They allow 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, mirroring 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 allow investors to trade Bitcoin on traditional stock exchanges, providing liquidity and accessibility while reducing the risks of direct Bitcoin ownership.
3. How Bitcoin Halving Affects 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 slows down the creation of new Bitcoin, potentially increasing scarcity and driving up Bitcoin’s value. As a result, spot ETFs may see 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 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’s essential to analyze the leading Bitcoin spot ETFs to gauge their current status.
4. Technical Analysis of Top Bitcoin Spot ETFs
The top players in the Bitcoin Spot ETF arena, including Grayscale (GBTC), BlackRock (IBIT), Fidelity (FBTC), Ark/21 Shares (ARKB), and Bitwise (BITB), dominate based on Asset Under Management.
| Bitcoin Spot ETFs | Price | 20-Day MA | MACD 15 Period | Williams % Range 20 Days | RSI 20 Days | Ultimate Oscillator |
| GBTC | $56.38 | $60.38 | -4.74 | 55.56 | 49 | 49 |
| IBIT | $36.08 | $38.64 | -3.04 | 88.43 | 49 | 49 |
| FBTC | $55.36 | $59.29 | -4.66 | 88.30 | 49 | 49 |
| ARKB | $63.31 | $67.80 | -5.33 | 87.92 | 49 | 49 |
| BITB | $34.51 | $36.97 | -2.92 | 88.43 | 49 | 49 |
Analysing the top five Bitcoin Spot ETFs using indicators like 20-Day MA, MACD 15 Period, Williams % Range 20 Days, RSI 20 Days, and Ultimate Oscillator reveals several interesting insights.
Grayscale’s GBTC shows a current price of $56.38, below its 20-day moving average of $60.38, with 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 shows similar patterns, priced at $55.36, under its 20-day MA of $59.29, with a MACD of -4.66. The Williams % Range sits at 88.30, while 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, with the RSI and Ultimate Oscillator both at 49.
Finally, Bitwise’s BITB is priced at $34.51, under 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.
Precisely, all the five top ETFs are currently trading below their 20-day MAs, indicating short-term bearish trends. However, the Williams % Range suggest some variations in oversold conditions, while the MACD indicates negative momentum.
4.1. Predicting Post-Bitcoin Halving Technical Status of Top Bitcoin Spot ETFs
After the Bitcoin halving, the technical landscape of these ETFs may change significantly. The reduction in Bitcoin supply could alter price dynamics, affecting their positions relative to the 20-day moving averages. Additionally, shifts in market sentiment post-halving may impact oversold conditions and negative momentum.
Endnote
As Bitcoin approaches its fourth halving, slated for mid-April 2024, the impact on Bitcoin ETFs remains a topic of intense interest. These halving events, occurring once every four years, not only adjust rewards for Bitcoin miners but also intricately shape Bitcoin’s supply and scarcity dynamics. Consequently, the value of Bitcoin ETFs, whether Spot or Futures, hangs in the balance, awaiting the outcome of this transformative event.
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