Experts: Bitcoin is now in almost the same phase as in 2016
The only difference is that interest in BTC is growing thanks to spot funds.
In early May, the attention of experts was drawn to the intriguing similarities between the current trajectory of Bitcoin and the situation in 2016. After a phase reminiscent of the previous bull cycle, Bitcoin is now in a more resilient position, coinciding with the end of the perceived risk zone of its 2016 counterpart. This resurgence is largely due to the prevailing sentiment towards risk assets, catalyzed by the meteoric rise of GameStop shares.
As in 2016, Bitcoin experienced a sharp drop following the fourth halving on April 19, when the block reward was halved to 3.125 BTC as part of a four-year cycle adjustment. It is noteworthy that while in the 2016 cycle, Bitcoin experienced a significant 40% decline after the halving, this time the rate has barely changed, partly due to the influx of funds into Bitcoin spot ETFs, increasing their deficit.
According to Andre Dragos, head of research at ETC Group, cryptocurrency hedge funds around the world were inclined to net buy Bitcoin immediately after the halving. Moreover, the recent consolidated 13-F report for Q1 2024 showed that Boston-based Bracebridge Capital has the leading position in BTC spot ETFs.
In an unexpected turn, a significant share of Bitcoin has begun to gravitate towards Asia, which is explained by the desire of Chinese investors to hedge against a potential devaluation of the yuan by diversifying into Bitcoin, financial experts say.
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