Demand from newly created exchange-traded funds justifies the boldest expectations: in one month of operation, they have accumulated $10 billion in investments, with products from BlackRock and Fidelity becoming the fastest-growing among the 5535 ETFs launched in the US over the last 30 years.
Last week, the total inflow into crypto funds amounted to $1.5 billion, excluding Grayscale (the outflow from the GBTC fund is not related to the attractiveness of Bitcoin). This is the second-largest result after the launch of ETFs.
The cryptocurrency price has already “digested” the negative impact of GBTC and miners’ desire to lock in profits ahead of the halving, surpassing the significant milestone of $50,000.
The halving has a strong deflationary effect, halving the emergence of new coins. If the annual pressure from new supply is currently estimated at $14 billion, it will decrease to $7 billion after the halving (calculations are made for a Bitcoin price of $43,000).
Therefore, the months of operation of spot ETFs are sufficient to offset the annual production of miners after the halving. Maintaining the current pace, exchange-traded funds alone will create a significant gap between demand and supply, leading to coin growth. Extrapolating trends to the end of the year, the analytical agency S1Production Studio has set the maximum target for Bitcoin in 2024 at 104-112 thousand US dollars.
In addition to ETFs, the catalyst for growth is the reluctance of long-term holders to part with Bitcoin at current prices: 69% of coins have remained inactive for over a year.
Market participants also point to the high valuation of Bitcoin’s long-term prospects, relative to the low share of derivative contracts compared to spot deliveries and the lack of excitement in margin trading.
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