“I don’t want to talk about Bitcoin anymore, I don’t care anymore.” Who knows if Jamie Dimon, CEO of JP Morgan, will intervene again – as he did at the last World Economic Forum in Davos – to discuss with his colleagues the recent rally of the most famous cryptocurrency now that it has passed the 50 thousand dollar mark. It is the first time since 2021, and the value has more than doubled compared to the price a year ago. This is thanks to the approval of BTC-based Exchange Traded Funds (ETFs) by the Securities & Exchange Commission (SEC), the US Consob. Arriving in January, within a month she restored prestige to the crypto born from the mind of Satoshi Nakamoto. And now even large funds are aiming, once again, to capitalize on the euphoria around Bitcoin.
The news that BTC could be the basis for the replication of ETFs, funds that can be bought and sold like stocks, had been in the air for some time. But now that the Wall Street giants have received the green light, the rally has consolidated. Bitwise, Ark Invest, WisdomTree, Invesco, Valkyrie, BlackRock, Franklin Templeton and Grayscale are just some of the names that have allowed, or will allow, their customers to put financial instruments in their portfolio that replicate the performance of Bitcoin. An epochal turning point, which intersects with the curiosity of financial analysts. Although central banks, from the Federal Reserve to the European Central Bank, remain skeptical about the safety of cryptocurrencies, the SEC’s decision was crucial in restoring confidence in industry gurus.
The data proves it. Bitcoin ETFs saw inflows of $1.1 billion last week, for a cumulative total of $2.8 billion since their launch on Jan. 11, CoinShares said. According to data from The Block, this is the highest weekly inflow level since the inception of bitcoin spot ETFs. Since January, the new financial instruments have accumulated a total of over 192,000 Btc in their custody. According to CoinShares, BlackRock and Fidelity topped the list with inflows of $693.6 million and $522.6 million respectively last week. Bitcoin-related products received the vast majority of inflows, with Ethereum and Cardano in second and third place. And overall, considerable numbers are being reached. According to data from CoinShares, total assets under management for cryptocurrency investment products reached the highest point since the beginning of 2022, at $59 billion.
Something may change during the year. According to analyst Michael Zhao of Grayscale, “Bitcoin issuance will halve around April 2024. Despite near-term miner revenue challenges, fundamental on-chain activity and positive market structure updates make this halving different on a fundamental level.” Hence the reasoning that many experts expected. “As we approach the 2024 halving, Bitcoin isn’t just surviving; it is evolving. Following the historic approval of Bitcoin spot ETFs in the United States and the change in flows, the structure of the Bitcoin market itself is evolving,” explains Zhao. And it is this aspect that analysts and institutional investors are focusing on.
But what will happen after the April halving? It’s easy to think of pricing implications. Beyond the generally positive on-chain fundamentals, Grayscale explains, “the bitcoin market structure appears advantageous for prices post-halving.” The lower rewards are expected to require “relatively less buying pressure to keep prices afloat, which, as demand increases, could result in higher prices.” Historically, Zhao concludes, “block rewards introduced potential selling pressure into the market, with the possibility that all newly mined bitcoins could be sold, impacting prices.” To date, 6.25 bitcoins mined per block are equivalent to approximately 14 billion dollars per year (with a price around 43,000 dollars, therefore lower than the current level). But it is a value that, with the combined provisions of ETFs and halving of emissions, can be quickly adjusted upwards.