Bitcoin Halving in 2024: How Will It Affect Bitcoin ETFs? First appeared on Coinpedia Fintech News
Anticipation is electric as Bitcoin prepares for its fourth halving in mid-April 2024. This event is not just another small incident for cryptocurrency miners. It's a seismic change that reverberates throughout the ecosystem. The rumors aren't just about miners. It's about how this event impacts every corner of the cryptocurrency world, including the growing Bitcoin ETF sector.
Learn more about this important moment and what it means for Bitcoin ETFs.
1. Bitcoin Halving: The Basics
Bitcoin halving is a special event in the Bitcoin system that occurs approximately every four years. The next halving, the fourth in Bitcoin history, is expected to occur between April 19 and 21, 2024. During the halving, the number of new Bitcoin miners receiving to process transactions is halved. Currently miners get 6.25 Bitcoin per block, but after the upcoming halving this will reduce to 3.125 Bitcoin. This reduction in reward is built into the Bitcoin protocol to control supply and ensure scarcity, making Bitcoin a deflationary asset over time.
The impact of this event extends throughout the Bitcoin ecosystem, including the Bitcoin ETF space.
2. Definition of Bitcoin ETF
Bitcoin Exchange-Traded Funds are investment funds that track the price of Bitcoin. This allows investors to gain exposure to Bitcoin without owning it directly.
There are two types of Bitcoin ETFs: Bitcoin Spot ETF and Bitcoin Futures ETF.
- Bitcoin Spot ETF Hold real Bitcoin to reflect price fluctuations.
- Bitcoin Futures ETFOn the other hand, invest in Bitcoin futures contracts, which are contracts 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 risk of owning Bitcoin directly.
three. Bitcoin Halving Impact on Bitcoin ETFs
The impact of Bitcoin halving on ETFs varies depending on the underlying asset and operating mechanism.
For spot ETFs that hold Bitcoin directly, halving slows the creation of new Bitcoins, potentially increasing their scarcity and increasing the value of Bitcoin. As a result, cash ETFs can deliver higher returns to investors.
Conversely, futures ETFs covering Bitcoin futures contracts may be indirectly affected by the halving through changes in market sentiment and price trends. However, the impact is expected to be less immediate and direct compared to spot ETFs.
Given the possibility that spot ETFs may be more impacted in the near term, it is important to analyze the major Bitcoin spot ETFs to gauge their current state.
4. Technical Analysis of the Best Bitcoin Spot ETFs
Top players in the Bitcoin Spot ETF space, including Grayscale (GBTC), BlackRock (IBIT), Fidelity (FBTC), Ark/21 Shares (ARKB), and Bitwise (BITB), dominate on the basis of asset management.
| Bitcoin Spot ETF | price | 20th MA | MACD 15 period | Williams % range 20 days | RSI 20 days | Ultimate Oscillator |
| GBTC | $56.38 | $60.38 | -4.74 | 55.56 | 49 | 49 |
| I will go | $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 |
Analyzing the top 5 Bitcoin Spot ETFs using indicators such as 20-day MA, MACD 15-period, Williams % Range 20-day, RSI 20-day, and Ultimate Oscillator reveals some interesting insights.
The current price of GBTC on Grayscale is $56.38, below its 20-day moving average of $60.38 and with a negative MACD of -4.74. Williams % Range (20-day) is 55.66 and Relative Strength Index and Ultimate Oscillator are both 49.
BlackRock's IBIT price is $36.08, below its 20-day MA of $38.64 and its MACD is -3.04. Williams % Range is noticeably high at 88.43, while both RSI and Ultimate Oscillator remain at 49.
Fidelity's FBTC shows a similar pattern with a price of $55.36 and MACD -4.66 from the 20-day MA of $59.29. Williams % Range is 88.30 while RSI and Ultimate Oscillator are both 49.
ARKB price for ARK/21 Shares is $63.31, below its 20-day MA of $67.80 and with a negative MACD of -5.33. Williams % Range is 87.92 while RSI and Ultimate Oscillator are both 49.
Finally, Bitwise's BITB price is at $34.51, below the 20-day MA at $36.97 and MACD -2.92. Williams % Range is 88.43. Both RSI and Ultimate Oscillator remain at 49.
To be precise, all of the top five ETFs are currently trading below their 20-day MA, indicating a near-term downtrend. However, the Williams % Range suggests some movement in oversold conditions, while the MACD indicates negative momentum.
4.1. Best Bitcoin Spot ETFs Predict the State of the Technology After Bitcoin Halving
The technical landscape for these ETFs could change significantly after the Bitcoin halving. A decrease in Bitcoin supply could change price dynamics, affecting its position relative to the 20-day moving average. Additionally, changes in market sentiment following the halving may contribute to oversold conditions and negative momentum.
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As Bitcoin approaches its fourth halving, scheduled for mid-April 2024, the impact on Bitcoin ETFs remains a topic of great interest. These halving events, which occur once every four years, not only adjust the rewards to Bitcoin miners, but also intricately shape Bitcoin's supply and scarcity dynamics. As a result, the value of Bitcoin ETFs, whether spot or futures, remains unbalanced and awaits the outcome of this revolutionary event.