Bitcoin ETF launch day: Analysis of the historic moment

On Jan. 11, 2024, the first Bitcoin spot ETFs in the U.S. finally launched after years of anticipation. To mark this milestone, CryptoSlate’s team was joined by SwissBorg’s Alex Fazel to share their perspectives.

Impact on Bitcoin price

The panelists had mixed views on how quickly the ETFs may impact Bitcoin’s price. Fazel noted research suggesting up to $600 billion may flow into Bitcoin from the ETFs over 18-24 months.

As Bank of America calculated, with $93 million of Bitcoin inflow, the BTC price will increase by 1%. However, Fazel acknowledged that it assumes no selling pressure.

Drawing parallels with the historical impact of gold ETFs in 2004, Liam unpacks the implications for Bitcoin’s future. He suggests that akin to the initial surge in gold prices following the introduction of its ETFs, Bitcoin might experience similar, if not more pronounced, market movements.

Bitcoin market cycles

The group also debated whether crypto market cycles resemble traditional financial markets. Fazel explained the typical four phases:

• Accumulation (Spring)
• Markup (Summer)
• Distribution (Fall)
• Markdown (Winter).

However, he observed crypto appears to lack a lengthy Fall distribution phase, stating:

“Look at the crypto winter from 2017 Jan. to all the way to 2020, literally overnight, within two weeks, Bitcoin was crashing.”

In contrast, Lead Analyst James Van Straten argued the May 2021 correction signaled the actual end of the previous bull run. He cited on-chain metrics like changing behavior among long-term holders.

Outlook for current cycle

The panel agreed the current bull cycle should last 12-18 more months. They predicted an aggressive top of around $500,000 per Bitcoin, with a conservative peak of $100,000-$200,000.

Fazel and Van Straten debated whether Bitcoin’s market dominance would rise or fall during this period. Van Straten expects dominance to increase as capital rotates into crypto’s reserve asset amidst economic uncertainty. However, Fazel sees dominance declining to 20-25% as alternative layer-1s gain ground. The two even placed a friendly wager on the outcome.

As the experts made clear, the launch of Bitcoin ETFs represents a monumental point on the road to mainstream adoption. However, debate continues around the precise price and market impact in the short and long term. CryptoSlate will keep monitoring the progress of this historic event.

To explore these insights further and stay ahead in the dynamic world of Bitcoin, listen to the full podcast discussion on CryptoSlate below, featuring analysis by Liam Wright, Nate Whitehill, James van Stratten, and Alex Fazel.

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