ETF Demand Motivates Investors to Acquire Bitcoin With Short-Term Views in Mind

The emergence of the well-awaited spot Bitcoin exchange-traded funds, shortly ETFs, has expectedly driven a new trend among investors. Since the new investment tools were launched in January, the number of short-term BTC possessions has climbed by nearly 55%, a tendency determined by the approval, launch, and subsequent investments in spot BTC ETFs.  

The flagship crypto has started the year on a positive note, as emphasized by the Bitcoin price chart, and the following months remaining are believed to be just as rewarding by crypto market experts. UK fintech company Finder conducted research consisting of the specialist price predictions offered by forty experts in the crypto industry regarding the performance they think Bitcoin will display by 2030’s end. 

On the flip side, other prophecies envision Bitcoin as a three-digit number by the end of the decade. Cathie Wood, a renowned Bitcoin prophecy sharer, envisions the asset at $87,875 in 2024. It has good prospects in the eyes of many well-established crypto market experts. Many market gurus resort to the traditional methods of obtaining Bitcoin, buying it from reliable crypto exchanges through the preferred routes.

What’s interesting and a must-learn is how the debut of exchange-traded funds drives inflows into Bitcoin and why the holdings are kept in the short term. 

No reason to fret over Bitcoin’s 13,000% growth 

Bitcoin enthusiasts are used to rejoicing over price growth in their favorite cryptocurrency. As Bitcoin became a household name, its demand exploded, pushing the price from a few bucks to thousands. If a Bitcoin was valued at around $500 eight years ago, you must now pay over $67K for the same unit of Bitcoin. This is a fortune, so kudos to the technology that made it fractionable. An investment made in 2016 would now be worth over 13,000% more. Yet, there’s no reason to bite your nails, for Bitcoin has once again dipped and permitted more investors to acquire fractions of the cryptocurrency at humbler prices. ETFs seem to be doing wonders to Bitcoin’s price against a backdrop of heightened institutional investment and a new type of investing mindset rising to popularity.  

What gives BTC this current boost? 

Thanks to the increasing popularity of exchange-traded funds, bitcoin investments exhibit growth among short-term holders, with whales and long-term holders keeping faith in the asset’s performances. Crypto whales are represented by individuals or entities that possess enormous amounts of crypto, being able to impact the liquidity’s asset and price collaboratively. On the other hand, long-term investors are the most stable investors, often possessing considerable amounts of Bitcoin as they may keep pouring money into it occasionally. They remain committed to their investments regardless of the storms they need to weather in pursuing wealth, keeping the investment intact for years or dozens of years. 

Despite the market downturn witnessed by the final of Q3, confidence in Bitcoin remained up, with investments falling negligibly to around 3.3MN BTC. Recent market performance analysis exhibits a rising trend among short-term buyers and a persistent bullishness among investors, resembling the environment that preceded the optimistic market behavior in 2020. This time, the increasing demand and adoption for spot BTC ETFs trigger price growth in Bitcoin, changing ownership and engagement rate dynamics.

ETFs spark enthusiasm among starters 

The recent rises in Bitcoin’s price can be attributed to the spiking popularity of spot Bitcoin ETFs, which is deduced by the doubling of short-term investor holdings registered within the January-June timespan. Short-term possessions went from around 2.2MN BTC by the beginning of the period to an impressive 3.3MN BTC by the middle of April, demonstrating that newcomers breaking into cryptocurrency-based investments find exchange-traded products appealing.

Moreover, volatility and liquidity rise as the accumulation of investments within today’s price range naturally points toward intensified trading activity. On a more positive note, the heightened involvement registered by institutions and retailers suggests that Bitcoin is starting to be embraced as a legitimate asset category. A share of the outflow entering Bitcoin is attributed to market newcomers who seek Bitcoin exposure through exchange-traded funds since they’re now available to everyone and the entering barriers are low.

What to expect from Bitcoin for what’s left of the year 

As expected, price prediction is at its peak among market experts and analysts. Everyone’s placing bets on what may be giving Bitcoin its new glow. The same abovementioned study from Finder found that more than one in five survey participants thought Bitcoin’s price would rise after April’s halving, when the rewards received by miners from that point on were cut in half. The halving helps decrease the supply of Bitcoin in circulation, which usually increases the prices of the remainder as fewer coins are available. 

Around 47% of polled individuals expect a new ATH around the year’s end. On the flip side, many specialists anticipate that more people who exhibited interest in Bitcoin through active price verifications will leap and break into the market this year owing to the new investment route greenlighted by the US Securities and Exchange Commission. The hype around ETFs persists in the US, as Europe and Canada have long approved of these products. 

Assuming the US Federal Reserve slashes the traditionally high benchmark rate, Bitcoin could register increased demand and become more expensive. However, it’s essential to remember that this cryptocurrency, like the remainder of the crypto industry, is a speculative asset that shouldn’t be taken lightly. If you’ve been flirting with Bitcoin but kept it out of your investment portfolio, you may be tempted to leapfrog now. Remember to treat these assets cautiously, just like you would with any other speculative asset that’s wrapped in uncertainty. 

What about the long-term holders of our days?

Those who have bought Bitcoin for the long term show no signs of doubt regarding their strategies or the cryptocurrency’s actual worth. Despite the numerous sell-off waves witnessed this year, the majority of long-term holders stick to their belief and investment, possibly adding more units of Bitcoin as time goes by. The long-term kept supply bought when Bitcoin used to cost more than it does now is modest, emphasizing that investors are optimistic about the asset’s future. Old stagers are unimpacted by market fluctuations, with large ones going all-in and pouring unmatched amounts of money into Bitcoin—just like the trend unfolded before the 2020 bull run.

Concluding 

Assuming you’re one of those late to the party and want to profit from Bitcoin now, remember to do your own research to make sure the context suits your intentions. Bitcoin and the rest of cryptocurrencies remain speculative – which can be a blessing and a curse, depending on your approach. 

 

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