Since receiving approval for spot ETFs in early January, Bitcoin has been a bit volatile, a trend that may worry some investors. The cryptocurrency surged 70% after the adoption, experiencing dramatic gains initially, but then lost momentum in mid-March, falling 14% since then.
However, despite recent volatility, Bitcoin’s outlook remains encouraging for both the short and long term.
Encouraging signs from historical patterns
According to the Motley Fool, the digital asset is reflecting a historical pattern spanning four years, initially experiencing a downward trend, followed by an upward trend in the last year. After witnessing a bear market, followed by a recovery in the second year and continued progress in the third, the cryptocurrency goes through the process of halving, after which it reaches a cyclical peak.
If we follow the pattern, Bitcoin underwent a bear market in 2022, currently putting us in the third year with the halving occurring in April. Although past performance is no guarantee of future outcome, we can speculate and use Bitcoin’s historical performance to gain insight into what 2025, the fourth year, may hold.
Using Past Patterns to Predict Bitcoin Price
In the third year, when the halving occurs, according to the Motley Fool, Bitcoin increases by an average of 125%, which puts the digital asset at the end of 2024 reaching $100,000, starting from its price in early 2024 of $44,000 .
According to past trends, the digital asset grows drastically by 400%, on average, in the year after the halving. If the trend repeats and Bitcoin ends this year in line with historical averages, its price could potentially reach around $500,000 by 2025.
Favorable changes in the supply-demand dynamics of digital currency increase the likelihood that price predictions will come true.
Avalanche of entry
According to Coindesk, July has historically been a bullish month for the digital asset, with ETFs witnessing around $130 million in inflows on the first day of July. Over the past decade, Bitcoin has seen an average increase of more than 11% in July, with 7 out of 10 months showing positive returns, according to the data.
With the cryptocurrency’s supply curbed by 50% since its April halving, we could see increased inflows into spot Bitcoin ETFs in the coming months.
Fed rate cut to boost prices
If the Fed cuts rates in late 2024, investors could look to Bitcoin as an alternative to the depreciating dollar, which moves in the opposite direction to the Fed’s interest rate adjustments. The increasing probability of Fed interest rate cuts later this year, coupled with de-dollarization, tends to create opportunities in digital currencies.
Additionally, any Fed rate cut would boost risk sentiment, which, in turn, would help Bitcoin prices.
ETFs to consider
Below, we list some ETFs for investors to increase their portfolio’s exposure to Bitcoin and benefit from its long-term uptrend.
ISShare Bitcoin Trust is registered IBIT has gained 12.56% over the past month and 8.67% over the past three months.
Grayscale Bitcoin Trust GBTC has gained 14.03% over the past month and 8.41% over the past three months.
Fidelity Wise Origin Bitcoin Fund FBTC has gained 12.98% over the past month and 8.64% over the past three months.
ARK 21 shares Bitcoin ETF ARKB has recorded an increase of 12.55% during the last month and 8.67% during the last three months.
Bitwise Bitcoin ETF Trust BITB has risen 12.56% over the past month and 8.70% over the past three months.
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Grayscale Bitcoin Trust ETF (GBTC): ETF Research Reports
iShares Bitcoin Trust (IBIT): ETF Research Reports
Fidelity Wise Origin Bitcoin Fund (FBTC): ETF Research Reports
ARK 21Share Bitcoin ETF (ARKB): ETF Research Reports
Bitwise Bitcoin ETF (BITB): ETF Research Reports
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