As a seasoned crypto investor with a few years of experience under my belt, I’ve seen my fair share of market ups and downs. And let me tell you, the second quarter of 2024 has been a tough one for Bitcoin.
In the second quarter of 2024, Bitcoin underperformed both stocks and bonds based on analyst assessments.
Based on Bloomberg’s data, Bitcoin has performed poorly against global equities, bonds, and commodities during the second quarter of this year. Specifically, it has experienced a decline of around 5% from its starting point in early April to mid-June.
Following its peak at $73,798 in March, efforts to regain that level have fallen short.
Bitcoin experienced a substantial gain of 67% during the last quarter, ending in March, significantly outperforming the indices of conventional assets.
One major driving force behind the surge was the buzz surrounding the United States’ approval of Bitcoin exchange-traded funds (ETFs). Nevertheless, this excitement appears to be waning based on the latest analysis from Noelle Acheson, who pens the Crypto Is Macro Now newsletter.
Acheson posits that the rate at which new funds are flowing into Bitcoin ETFs has decreased as of late. She primarily accredits these recent inflows to individuals who already own Bitcoin, emphasizing that it is fresh investment that holds the power to impact the market price.
Bitcoins Exchange-Traded Funds (ETFs) have attracted over $15 billion in investments, making them highly sought-after investment options on Wall Street.
Based on their observations of funds shifting from digital wallets on cryptocurrency exchanges towards new ETF (Exchange-Traded Fund) products, the strategists at JPMorgan Chase projected that the total net investment in crypto for this year, including contributions from ETFs and other sources, would amount to approximately $12 billion.
The estimation is a lot lower compared to the $45 billion recorded in 2021 and $40 billion in 2022.
Based on this information, the strategists have expressed their doubts about the speed of inflows persisting in the second half of 2024.
As a crypto investor, I’ve come across the perspective of economist Acheson, who believes that the actions of Bitcoin miners could be a contributing factor to its underperformance. Specifically, he suggests that the energy consumption required for mining may be deterring some potential investors due to environmental concerns. Therefore, I ponder if reducing the energy footprint of Bitcoin mining or exploring more renewable sources could potentially help boost its market appeal.
As a researcher studying the cryptocurrency market, I’ve observed that miners have had to sell off their Bitcoin holdings in recent times to keep their operations running. The profitability of mining has taken a significant hit following the April halving. In this event, the block reward was reduced from 6.25 BTC to 3.125 BTC.
As a researcher studying the cryptocurrency mining industry, I came across some noteworthy findings in recent months. In May, Hashrate Index, a crypto mining analytics firm, announced that miners should brace for a significant increase in mining difficulty in the near future. This revelation followed a warning from research firm Kaiko, who had previously signaled imminent selling pressure from miners due to market conditions.
“If miners were compelled to offload a portion of their Bitcoin holdings within the next month, this could lead to market downturns.”
Despite the slump in performance, some analysts remain bullish on Bitcoin.
Based on recent reports from crypto.news, I, as a researcher, have come across predictions from two different analysts regarding the year-end price of Bitcoin. Analyst CryptoCon has suggested a target price of $91,539, while Michael Novogratz from Galaxy Digital estimates a similar range, around $100,000.
As an analyst, I’d rephrase that statement as follows: I, as an analyst, would note that Cathie Wood of Ark Invest holds a particularly bullish perspective regarding Bitcoin’s future value. Her long-term price projection for the cryptocurrency has been revised upward to an impressive $3.8 million.
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2024-06-14 12:29