Cantor CEO Makes Gold And Bitcoin ETFs Comparison, Foresees True Rally With Halving
January 16 2024 - 1:54PM
NEWSBTC
In a highly anticipated development, the United States Securities
and Exchange Commission (SEC) granted regulatory approval for 11
spot Bitcoin ETFs, sparking excitement within the crypto
community. However, despite initial expectations of a
significant price surge, the Bitcoin market has experienced an 8%
price drop since the ETFs began trading. Bitcoin ETFs To Unfold
Impact Over Time? Drawing a comparison with the launch of the
first Gold ETF, Cantor Fitzgerald Asset Management CEO, Howard
Lutnick, noted that the immediate rush to buy the asset did not
materialize. Lutnick remarks that historical data from the launch
of the Gold ETF, SPDR Gold Shares (GLD), reveals that substantial
price appreciation took place over several years. When GLD
was introduced in November 2004, the price of gold stood at around
$700. By December 2023, it had surged to an all-time high of
$2,145. The gold market capitalization, estimated at $1 trillion to
$2 trillion pre-ETF approval, ballooned to $16 trillion within a
few years. Likewise, despite the initial hype surrounding the spot
Bitcoin ETFs, experts suggest that the true impact of these ETFs
will unfold over an extended period. Related Reading: Bitwise
CIO Equates Bitcoin ETF Impact To 1.4 Halvings: What This Means As
reported by NewsBTC, market analysts at CoinShares estimate that
the United States possesses around $14.4 trillion in addressable
assets. Assuming a conservative scenario where 10% of these
assets invest in a spot Bitcoin ETF with an average allocation of
1%, it could potentially result in approximately $14.4 billion
inflows within the first year. These significant inflows have the
potential to propel the Bitcoin price to new highs and initiate a
notable price uptrend. However, as Cantor CEO Howard Lutnick
predicted, the halving event, expected to occur in April, remains
the primary catalyst for Bitcoin’s growth. Dual Catalysts For
Crypto Market Enthusiasm As the Bitcoin halving event approaches,
analysis of past halvings reveals a pattern of substantial rallies
leading up to the event, followed by a brief correction and
consolidation period before a major bull run and peak. The peak
typically occurs approximately 18 months after each halving,
showcasing a consistent trend. The first halving occurred on
November 28, 2012, reducing the block reward from 50 BTC to 25 BTC.
At the time of the halving, the Bitcoin price was around $13.
However, within a year, it reached a peak of $1,152. Despite a
subsequent fall in price to nearly $200 in 2015, critics declared
the bursting of a bubble and the demise of Bitcoin. Yet, this trend
would repeat in subsequent halving cycles. Related Reading: Crypto
Community Raises Alarm Over Coinbase’s Dominance Of Bitcoin Held In
Spot ETFs The second halving occurred on July 16, 2016, reducing
the block reward to 12.5 BTC. At the time, Bitcoin was valued at
$664. The following year saw a peak of $17,760. Similarly,
the third halving occurred on May 11, 2020, lowering the block
reward to 6.25 BTC. Bitcoin was priced at $9,734 during the halving
and peaked at $69,000 the following year. Based on the historical
cycles, it is evident that the upcoming halving scheduled for April
2024 will be a significant catalyst for Bitcoin. However, it is
important to note that Bitcoin ETFs will also play a crucial
role. These ETFs are expected to positively impact the
cryptocurrency’s price and bring new inflows and interest to the
crypto market. Featured image from Shutterstock, chart from
TradingView.com
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