Cryptocurrency
Bitcoin and other
cryptocurrency investments have climbed in the past few months, mostly for one
big reason: anticipation of spot bitcoin ETFs. And the eagerly awaited launch
is almost here.
Spot bitcoin ETFs are
expected to create new and bigger opportunities for institutions to invest in
cryptocurrencies and other digital assets.
But while some crypto enthusiasts tout bitcoin ETFs as a major tailwind for digital assets in 2024, others say regulatory approval could become a sell-the-news event in the short run.
Bitcoin spiked to 20-month
highs above $45,000 to start 2024 and traded above $44,000.
How Bitcoin
ETFs Will Drive Institutional Demand
Thirteen spot bitcoin exchange-traded fund applications
await approval from the Securities and Exchange Commission. They include
applications by BlackRock, ARK Invest, Grayscale Investments,
WisdomTree, VanEck, Valkyrie, Invesco and Fidelity.
The window for the SEC to approve ETF applications
opens on Friday, Jan. 5 through Jan. 10, Bloomberg Intelligence ETF analyst
James Seyffart. Those dates correspond to deadlines for an application filed by
Cathie Woods' ARK Invest, according to Forbes.
Seyffart expects approvals between Jan. 8 and Jan.
10. He sees a 10% chance or less that the SEC will decline to approve filings
by Jan. 10. The SEC could technically issue approval orders on at least nine
applications before the window, Seyffart posted.
Bitcoin Halving: The Next Milestone
But spot bitcoin ETF approval
isn't the only driving factor for bitcoin in 2024. The next halving event is
expected around April. Halving events help control the finite supply of 21
million bitcoins by cutting in half the amount of crypto rewards doled out to
miners.
The last bitcoin halving event
occurred in May 2020, when mining rewards fell to 6.25 bitcoin per block mined
from 12.5 bitcoin per block. Some refer to the events as halvings, a
portmanteau of "halving" and "happening."
Halving events occur after every
210,000 bitcoins are mined, which takes roughly four years. The price of
bitcoin has historically risen in the months after halving events as the
creation of new bitcoins slows.
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