Although Bitcoin is still up significantly since the beginning of the year, it has lost another 16% since its recent all-time high. The losses of Solana and Ethereum are even greater. Crypto ETNs record outflows.
18 April 2024, FRANKFURT (Börse Frankfurt). The Bitcoin halving, which is expected to take place this Saturday, continues to cause high fluctuations in the Bitcoin price - and most recently significant price losses. Bitcoin had risen to over 73,000 US dollars in mid-March, but is currently trading at less than 61,000 US dollars. The gain since the beginning of the year has shrunk to 38%. The geopolitical uncertainties in the Middle East are making themselves felt. Some people now believe that the halving has been priced in.
Bitcoin halving halves the reward that Bitcoin miners receive for providing computing power to generate new blocks in the Bitcoin network. Initially it was 50 bitcoins. After three halving events - each after four years - it is currently 6.25 bitcoins. 3.125 bitcoins with the upcoming halving. All bitcoins are not expected to be mined until around the year 2140.
Bernhard Wenger from the issuer 21Shares expects a volatile sideways market for the time being: "We assume that the halving will have no immediate impact on the price trend, as we have already seen a new all-time high before the halving this time," he explains. Historical experience shows that new records and further significant rises only occur a few months after the halving. "In combination with the upcoming possible interest rate cuts, these are strong fundamental reasons for a positive price trend until the fall and the end of the year."
"Halving events were followed by very significant price increases"
The ETC Group assumes that the halving will take place on Saturday at around 7.20 pm. According to chief analyst André Dragosch, the halving has not yet been priced in. "Bitcoin halvings are best understood as supply shocks - historical halving events have been followed by very significant price increases in the past," he explains. "On average, in the last three halvings, the price increased by a factor of 17x 500 days after the halving, which corresponds to an increase of around 1,800 percent." According to the ETC Group's model, the equilibrium price of Bitcoin could rise to USD 103,000 by the end of 2024, to USD 172,000 by the end of 2025 and finally to USD 215,000 by the end of the next Bitcoin era in 2028.
Issuer WisdomTree is also confident about Bitcoin: "The high demand for ETFs and halving is leading to a shortage of supply and potentially higher demand," explains Chris Gannatti, Global Head of Research. If the wave of global acceptance continues, everything points to another halving cycle with strong growth. Analyst Timo Emden from Emden Research is more skeptical: "Bitcoin miners could be forced to sell their holdings after the halving for profitability reasons. And private investors could close out their profits.
First high inflows, now outflows
Due to the rapid price increase, the upcoming Bitcoin halving and the approval of the Bitcoin ETF, trading in crypto ETNs also remains lively. "There's a lot going on with cryptos," explains Jan Duisberg from ICF Bank. Leo Puschmann from Lang & Schwarz also confirms this. "Recently, however, things have become a little quieter." "The figures for the past 20 days indicate continued interest in Bitcoin, albeit not quite as strong as a few weeks ago," reports Wenger from 21Shares. He reports larger outflows for Ethereum ETNs and smaller ones for crypto baskets, Cardano and Solana trackers. Issuer ETC Group even sees outflows for the ETC Group Physical Bitcoin and the other major Bitcoin ETNs for the past 30 days, but still high inflows since the beginning of the year. Ethereum ETNs are also on the sell lists.
The most traded crypto ETN on Xetra in March was once again the ETC Group Physical Bitcoin (DE000A27Z304), but in second place was a Solana tracker, namely 21Shares Solana Staking (CH1114873776). This is followed by the Bitcoin ETNs from VanEck, 21Shares, WisdomTree and CoinShares and then two VanEck ETNs on Ethereum and Solana as well as the 21Shares Ethereum Staking. The most traded crypto basket is only in 17th place, the 21Shares Crypto Basket (CH0445689208).
Ethereum and Solana hit
Following the approval of Bitcoin spot ETFs by the US Securities and Exchange Commission (SEC), there is now speculation about an Ethereum ETF. The SEC has apparently received several applications. A decision is expected in May. Although Ethereum also rose sharply to a peak of USD 4,088 by mid-March, it has recently slipped below USD 3,000. The cryptocurrency Solana has also been under heavy pressure since the beginning of the month, with the price falling from USD 200 in mid-March to just USD 134 at present. This has wiped out a large part of the price increase this year.
By Anna-Maria Borse, April 18, 2024 © Deutsche Börse AG
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