The ability to hold Bitcoin in mainstream portfolios green-lights portfolio diversification into the crypto asset. Many expected significant capital inflows into the market and were satisfied. <\/p>\n

The record-breaking response to the bitcoin ETFs and Bitcoin’s price surge indicates the market’s current sentiment. Both have continued to spur bullishness among investors and institutions.<\/p>\n

At least two factors could contribute to a drastic increase in price and Bitcoin supply shock over the next three months: continued high demand for ETF shares and the Bitcoin halving event in April.<\/p>\n

After the upcoming halving, miners’ block rewards will be cut in half. As a result, the rate of BTC daily production will decrease. <\/p>\n

At the moment, approximately 900 BTC is being created daily. After the halving event, this number will drop to 450 BTC. This will further dwindle the supply and lead to a discrepancy in supply and demand. The production slash could lead to higher BTC prices as investors of all levels and ETF issuers scramble to increase holdings.<\/p>\n

There is a risk of ETFs failing too soon. Most financial advisors, therefore, allow the sale of shares 90 days past launch or after 90 days of trading. As the ETFs started trading on January 11, the 90-day period should commence by early May, further pushing BTC\u2019s price upward.<\/p>\n

It is possible to have a black swan event, seeing BTC break its previous record of $69,000 and achieve a new all-time high before the halving. Chijs predicts $100,000 BTC in the coming two to three months. <\/p>\n

Impact on the broader financial ecosystem<\/h3>\n

Some have noted that big banks were notably absent during the ETF action. Banks can participate in the ETF ecosystem but need the US SEC to redefine crypto assets. <\/p>\n

In a stunning move, a trade group coalition making up the Banking Policy Institute asked the SEC to modify the rules around crypto asset custody, allowing them to act as custodians, as is the regular practice for most ETPs. Bitcoin proponents would not have imagined such interest back in the day, but here we are.<\/p>\n

Increased competition: Fee wars<\/h3>\n

Despite significant Grayscale-related outflows in the first few days, ETFs stabilized to massive net-positive inflows. Expect competition among Bitcoin ETFs for features and fees. Grayscale Bitcoin Trust (GBTC) is the most expensive\u2014offering 1.5 percent in fees. Bitwise opts not to charge fees for the first six months and then caps them at 0.2 percent afterward. <\/p>\n

A New Era Merging Wall Street, Crypto, and Main Street<\/h2>\n

The triumphant launch of spot Bitcoin ETFs broke all expectations and models. Early on, ETF issuers were able to bridge Wall Street, crypto, and Main Street by creating a familiar and easily accessible investment product. <\/p>\n

The early success of ETFs has numerous implications for the status of digital assets, the demand around Bitcoin, the dynamism of crypto trading, the total crypto market cap, and how people build mainstream portfolios from now on. <\/p>\n

Spot Bitcoin ETFs are a crucial milestone in the maturity of Bitcoin and crypto as an asset class. They officially begin significant institutional involvement with trillion-dollar players competing for dominance. Demand is expected to increase as the funds accumulate Bitcoin at rates exceeding daily production. <\/p>\n

Despite the promising data and optimistic projections, we remain in uncharted territory. Corrections are inevitable, and black swan events could happen. <\/p>\n

Wall Street has brought crypto to Main Street, but this development’s full impact and transformation are still unfolding. <\/p>\n

Navigating the landscape requires a keen understanding of market dynamics, careful risk management, and keeping a well-informed perspective as events unfold at unprecedented speed.\u00a0<\/p>\n

This is a guest post by Ivan Serrano. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.<\/em><\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin and the rest of crypto went through a brutal cycle in the last two years. Dubbed “crypto winter,” the unforgiving market crushed the hopes of many traders, startup founders, and investors. Marked by scandals, regulatory uncertainty, and lots of FUD (fear, uncertainty, and doubt in crypto parlance), crypto winter brought down some of the […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-24511","post","type-post","status-publish","format-standard","hentry","category-crypto-news"],"_links":{"self":[{"href":"https:\/\/bitcoins-101.com\/wp-json\/wp\/v2\/posts\/24511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoins-101.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoins-101.com\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoins-101.com\/wp-json\/wp\/v2\/comments?post=24511"}],"version-history":[{"count":0,"href":"https:\/\/bitcoins-101.com\/wp-json\/wp\/v2\/posts\/24511\/revisions"}],"wp:attachment":[{"href":"https:\/\/bitcoins-101.com\/wp-json\/wp\/v2\/media?parent=24511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoins-101.com\/wp-json\/wp\/v2\/categories?post=24511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoins-101.com\/wp-json\/wp\/v2\/tags?post=24511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}