Despite facing many obstacles; The price of Bitcoin (BTC) could rebound towards $60,000 this year, according to CoinShares Analytics, which predicted - in a report published on Monday - that the year 2024 will be pivotal for digital assets and that the price of Bitcoin will rise on the back of the recent launch of Bitcoin spot trading funds on the exchange. (spot ETFs) in the United States; On January 10, the US Securities and Exchange Commission (SEC) licensed 11 Bitcoin exchange-traded funds, including BlackRock’s iShares Bitcoin Fund, Grayscale’s Bitcoin Investment Fund, and 21Shares Bitcoin Fund. ) is publicly traded for ARK, and these approvals have opened the way to begin competing for market shares.
Previously, the SEC had rejected previous applications for Bitcoin spot exchange-traded funds due to concerns about investor protection, and its current approval represents a significant change for the crypto sector. The eleven funds witnessed a trading volume of $4 billion upon their launch (the highest number in the history of exchange-traded funds on their opening day, “according to experts”). “This event has been a decade in the making — since the initial SEC filing — and this will open the market to a broader range of investors, representing an important step in the acceptance journey,” James Butterfill, head of research at CoinShares, wrote on Monday. Digital Assets.
Butterville pointed out that it is difficult to predict the influx of investments after the launch, but he estimated that 10% of the current assets under management ($3 billion) could raise the price of Bitcoin to $60,000. He did not specify a time period or a specific month for this event to take place. He also pointed out that monetary policies It will play an important role in determining the value of Bitcoin this year, as it has been stated that high interest rates push investors to explore alternatives such as US Treasury bonds, but it is expected that these rates will be reduced at the beginning of 2024, which could increase the attractiveness of Bitcoin and gold.
Why Bitcoin Price Drops Despite Exchange-Traded Funds (ETFs) Approvals
The price of Bitcoin was up 1.3% to $40,063 (its lowest point in 7 weeks) at the time of writing. This represents a decline of approximately 20% since Bitcoin spot trading funds began trading on the exchange on January 11; This is due to the exit of funds from Grayscale's Bitcoin ETF (GBTC), as its conversion into a spot Bitcoin ETF enabled investors to withdraw their stakes and led to the sale of large amounts of BTC. This significant increase in Bitcoin's circulating supply has caused a surge in selling pressure, with nearly $2 billion having exited the GBTC Fund since it was converted into a spot Bitcoin exchange-traded fund.
In the midst of Bitcoin's recent struggles, the market showed some optimism in Ethereum (Ethereum-ETH) against the backdrop of the presence of requests for Ethereum spot trading funds on the stock exchange. Observers indicate that there are proposals for exchange-traded funds that directly include Ethereum currencies, but there is no guarantee of the SEC's decision. Regarding her. The improved and easier-to-use second layer, along with the potential launch of an Ethereum spot exchange-traded fund, is expected to stimulate a new influx of funds into Ethereum.
