The halving has proven to be a “sell the news” event for Bitcoin, and with continued uncertainty over interest rates, a new rally may take some time.
It’s been two weeks since Bitcoin’s halving, and at least in the short term, the rare event has not brought the price explosion that bulls had hoped for.
You could argue that a lot of this is beyond BTC’s control. Heightened tensions in the Middle East led to a sudden and sharp drop in the cryptocurrency market.
I saw this on April 19th, when Bitcoin fell below $60,000 following news of an Israeli attack on Iranian territory.
Despite the quick recovery in prices, further unrest or escalation in this increasingly complex conflict could create further headwinds.
While $60,000 has proven to be an important psychological threshold for BTC, resolve was severely tested on May 1, when the price fell to a low of $56,555.
Here are five things we’ve learned since the halving that can help us plan for what’s next.
1. April was Bitcoin’s worst month in nearly two years
The Crypto Fear and Greed Index has been flashing scores of “Greed” or “Extreme Greed” for weeks, but traders got a sobering reality check in early May.
Why? Because BTC fell sharply in April. After reaching an all-time high of $71,329.30, the price plummeted by 14.95% to close the month at $59,228.70.
Although the value has recovered successfully, people are still cautious about the future. This is the first time that Bitcoin has hit a new all-time high before the halving.
Some analysts believe this could be the best-case scenario for the current bull cycle, while others believe it could be a long wait before the rally resumes.
2. Predictions for Bitcoin’s future are mixed
Arthur Hayes, former founder of BitMEX, claimed that he had always seen this happening, and that a perfect series of events had dragged Bitcoin down:
Nonetheless, he does believe that Bitcoin has now hit a local low and that “prices will fluctuate between $60,000 and $70,000 until August.”
Although Standard Chartered doubled down on its prediction that BTC will reach $150,000 by the end of the year, the bank warned that the Bitcoin price could fall further to $50,000.
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, also expressed caution. In a note shared with crypto.news, he said that “sticky inflation appears to be associated with excessive speculation in Bitcoin and stock prices” — and it may be some time before the Fed starts to ease interest rates. He wrote:
3. Bitcoin ETFs are having a hard time
After receiving approval from the U.S. Securities and Exchange Commission in January, interest in an exchange-traded fund based on the spot price of bitcoin appears to have cooled.
Data from SoSo Value shows that on May 1, the BTC ETF saw a record outflow of $563 million, and a six-day losing streak ended on May 3, when total inflows were $378 million. Bloomberg Intelligence analyst James Seyffart said at the time that "inflows and outflows are normal in the life cycle of ETFs."
Still, despite widespread predictions that the Bitcoin and Ethereum ETFs coming to Hong Kong would bring in volumes far exceeding their Wall Street debuts, it was a disappointing launch, to say the least.
The spot Bitcoin ETF saw only $8.5 million in trading volume on its first day, a 98.6% decrease from the $628 million it received when it arrived in the U.S. But JAN3 CEO Samson Mow believes that exchange-traded funds in Asia simply need time to gain a foothold:
#HongKongBitcoinETF is going to be huge. Maybe not on day one or day two, but the long term impact is huge. Chinese investors really have nowhere else to put their money at this time. https://t.co/hOSCa7siid
— Samson Mow (@Excellion) April 29, 2024
4. Miners wait anxiously
CryptoQuant recently told crypto.news that unless prices recover in the coming weeks, Bitcoin miners could face significant challenges — with higher electricity costs and permanently lower block rewards weighing on the industry. Head of research Julio Moreno said:
5. Pay attention to these two
Some executives are undeterred and continue to hold as much Bitcoin as they can.
MicroStrategy currently owns 214,400 BTC at an average price of $35,180 per coin. Given that Bitcoin is trading at $63,600 at the time of writing, Michael Saylor’s big bet means the company is sitting on $8.1 billion in paper profits.
Meanwhile, Block, which is led by former Twitter CEO Jack Dorsey, has now begun dedicating a significant portion of its gross profits to buying additional BTC.
It’s impossible to predict where Bitcoin will go next, but it looks like there’s reason to be optimistic.