Growth of crypto assets, recent ATH outperformance on BTC
Have a great weekend investors. Although we are predominantly a stock site, cryptos, thanks to ETFs and companies like Coinbase, are making their way into the world of stocks, so since we're taking a break from the traditional markets, we'll give you a bit of a read on the recent growth of cryptos. 😊
New spot bitcoin ETFs have attracted institutional inflows into cryptocurrencies, and as a result, some crypto bulls are eyeing $100,000 as the next level for BTC after the leading cryptocurrency briefly surpassed $70,000 for the first time in its history on Friday.
Mark Connors, director of research at digital asset manager 3iQ Corp, said he believes bitcoin (BTCUSD) is likely to reach as high as $100,000 before the next halving - which is expected around April 20.
Halving is a mechanism written into the bitcoin blockchain algorithm that controls the coin supply, which has a limit of 21 million. With halving, the reward for mining bitcoins is halved, meaning miners will receive 50% fewer tokens for verifying transactions. The halving would occur after every 210,000 blocks mined - or roughly every four years - until the maximum supply of bitcoins is released.
Bitcoin rallied this year before being cut in half "because we're now in a demand shock, whereas everything before was about a supply shock," Connors said Friday during an interview with MarketWatch.
BTC investing has expanded this year thanks to BTC ETFs. Meanwhile, BlackRock, which issues these ETFs, filed amendments with the Securities and Exchange Commission this week to add bitcoin to its Strategic Income Opportunities Fund (BSIIX) and Global Allocation Fund (MALOX).
"These filings by BlackRock help strengthen the case for bitcoin in the portfolio for potential diversification benefits and enhanced returns," said Charles Yu, vice president of research at Galaxy Digital.
"There is likely to be a much greater impact on BTC demand from the second-order effects of bitcoin ETF approvals, as bitcoin would likely be added to their portfolios by a wide range of other investment vehicles (e.g. mutual funds, closed-end and private funds, etc.) across a variety of investment objectives and strategies," Yu wrote in a note on Friday.
With BTC's rise, eyes are also on ETH, which has reached the $4,000 mark but is still waiting for its peak of $4,865 reached in November 2021. Investors are closely awaiting the ether ETF's approval.
Still, even if an ether ETF is approved, "the impact on the market could be minimal compared to bitcoin," noted Thomas Tang, vice president of cryptocurrency investments at Ryze Labs. The ETF generated total trading volume of $2 million on its first day of trading, while the ProShares Bitcoin Strategy ETF, the first ETF investing in bitcoin futures, saw trading volume of more than $1 billion on its debut, Tang noted.
So it's just a little window when we have the weekend that we have in the cryptocurrency field. Since we have newcomers here, I'd better state this time, it's definitely not a recommendation or investment advice and don't forget that this asset class is still highly volatile. So have a great weekend and have a good one. 😊🍀