Bitcoin’s ascent to an all-time high of $69,000, fuelled by a substantial $7.35 billion (R138.78 billion) influx into Bitcoin ETFs in 2024, has captivated South African investors. A Bloomberg report credits this surge to institutional capital flowing into exchange-traded funds, underpinning the cryptocurrency’s bull run.
Historically, Bitcoin’s price tends to dip before its halving event, a pattern noted in past cycles. Capo, a crypto expert known for his bearish stance, forecasts a Bitcoin price correction to $45,000 (R849,150), attributing potential declines to the Federal Reserve’s elevated interest rates. Despite current bullish sentiment, a fall below the $60,000 (R1,132,200) threshold could signal the beginning of a bearish phase, according to Capo.
Bitcoin’s recent rally has been significantly driven by demand from US-listed ETFs, approved by the SEC in early January. Over the past year, Bitcoin has seen a staggering 190% increase, with more than a 55% gain year-to-date, indicating a strong influx of institutional investment since the debut of Spot ETFs.
Capo’s bearish projection hinges on the adverse impacts of prolonged high-interest rates on the economy, potentially leading to recession and market corrections. With the UK and Japan already declaring recessions, such economic downturns could see Bitcoin adjust to what Capo believes is its “fair price” of $45,000.
The upcoming Bitcoin halving in April 2024 might further justify Capo’s prediction, aligning with the typical pre-halving price correction observed in previous cycles. However, the introduction of Spot Bitcoin ETFs presents a new dynamic, potentially sustaining Bitcoin’s price through consistent institutional demand, diverging from historical halving cycle trends.
This analysis sparks a keen interest among South African crypto traders and investors, keen to navigate the volatile Bitcoin market. With institutional and retail players shaping the market in unprecedented ways, the months leading up to the halving event will be critical for assessing Bitcoin’s trajectory and its implications for the broader cryptocurrency landscape in South Africa.
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