- Analysts anticipate more than $2.4 billion inflow into U.S. spot Bitcoin ETFs in the first quarter if approved, expecting prices to remain high.
- VanEck believes that spot Bitcoin ETFs will trade with approximately a 0.1% spread and notes that many brokers have no commissions, triggering increased demand.
- Bloomberg analyst James Seyffart mentioned that the potential window for approving a spot Bitcoin ETF would be between January 5-10.
According to a new report from investment manager VanEck, Bitcoin is expected to hit a new all-time high by the fourth quarter despite a possible economic downturn in 2024.
VanEck Reveals Bitcoin Price Predictions
According to a new report from investment manager VanEck, despite the expectation of a U.S. economic slowdown next year, the anticipated approvals of spot ETFs and the upcoming halving event could lead Bitcoin to reach new all-time highs by the fourth quarter.
VanEck analysts Matthew Sigel and Patrick Bush expect a recession in the first half of 2024 due to the U.S. economy becoming more vulnerable to shocks due to slowing economic momentum and cooling inflation. However, analysts anticipate that if approved, there will be more than $2.4 billion inflow into U.S. spot Bitcoin ETFs in the first quarter, sustaining high prices.
VanEck believes that spot Bitcoin ETFs will trade with approximately a 0.1% spread and notes that many brokers have no commissions, triggering increased demand. The U.S. Securities and Exchange Commission (SEC) has not yet approved a spot Bitcoin ETF in the U.S., having previously approved futures-based funds in 2021.
The deadlines for the SEC to decide on applications from companies, including VanEck, BlackRock, Bitwise, WisdomTree, Invesco, Fidelity, and Valkyrie, are expected to fall in mid-January. Bloomberg analyst James Seyffart mentioned that the potential window for approving a spot Bitcoin ETF would be between January 5-10.
Bitcoin Halving and All-Time Highs
Bitcoin’s fourth halving event, where block rewards are halved, is expected in April and serves as another potential catalyst, similar to other halvings that led to significant rallies for the cryptocurrency in 2016-2017 and 2020-2021. VanEck analysts expect the event to pass with “minimal drama,” with Bitcoin surpassing $48,000 after the halving and miners not facing significant challenges due to improved balances.
Analysts then predict Bitcoin to reach new all-time highs by November, creating “presidential-sized anxiety” in the U.S. election year and reaching up to $160,000 by the ultimate cycle peak. They added, “If Bitcoin reaches $100,000 in December, we make a long-term call that Satoshi Nakamoto will be named Time Magazine’s ‘Person of the Year.'”
Ether Will Not Surpass Bitcoin, but Solana’s Performance Will Continue
Sigel and Bush stated that Ether will not surpass Bitcoin in market value in 2024, especially with Bitcoin having a more clear regulatory status. However, they expect Ether to outpace mega-cap tech stocks. VanEck, like past cycles, anticipates Bitcoin leading the rally next year, with Ether starting to perform after the halving. Still, they do not foresee a “flippening.”
The ETH:BTC price ratio is currently near its lowest level since July 2022, at around 0.05. Analysts believe that Ether will lose market share to other smart contract platforms with less uncertainty in scalability, such as Solana. They also expect Ethereum Layer 2 solutions, like Polygon, Arbitrum, and Optimism, to consolidate toward two or three dominant players in terms of value and usage – one of which will have higher monthly DEX volume and Total Value Locked compared to Ethereum.
VanEck expects Solana to be one of the top three cryptocurrencies in market value in 2024, joining the “spot ETF wars” alongside the first two digital assets, Bitcoin and Ether, driven by increased DeFi activity on the blockchain.
