On April 20, the cryptocurrency market will soon host the quadrennial Bitcoin halving event.
As the halving event approaches, Bitcoin is once again above the $70,000 mark.
According to Coinglass data, Bitcoin hit $72,650 on Monday, the highest level in nearly four weeks, and liquidated a $55.72 million short position, not far from the annual high that Bitcoin hit on March 14.
As mentioned in the previous article,The halving events are all closely linked to the entire crypto market's bull cycle. Historically, after every halving occurred, the price of Bitcoin rose rapidly in 6 to 18 months and reached a record high.
According to the plan, Bitcoin will halve the rewards for mining new blocks in a week, probably a few days around April 20. This may be a catalyst for Bitcoin's rise.
In the Bitcoin ecosystem, halving is a pre-programmed phenomenon that reduces the mining speed of new bitcoins by half. Historically, this event was good news for long-term holders.
However, it is worth noting that shortly after this peak, the price of Bitcoin usually undergoes a sharp downward adjustment, entering a period commonly known as the “crypto winter,” where its price falls by an average of more than 80%. Looking at the shorter time frame, September was a particularly bearish month for Bitcoin.
There were many major events in the “coin circle” in April
In addition to cyclical events such as Bitcoin's halving, Bitcoin has also recently ushered in a lot of good news.
The Hong Kong Bitcoin Spot ETF is about to be approved, and Harvest and Huaxia are expected to be the first to try it out
Following the listing of the first batch of 11 Bitcoin spot ETFs in the US, financial institutions in Hong Kong are also speeding up the layout of virtual asset spot ETFs. Harvest International, a subsidiary of Harvest Fund, submitted a Bitcoin spot ETF application to the Hong Kong Securities Regulatory Commission at the beginning of this year, and finally made the latest progress.
On April 10, the Hong Kong Securities Regulatory Commission updated the list of virtual asset management fund companies on its official website, adding Harvest International and Huaxia Fund (Hong Kong), which means that these public funds have added virtual asset management services to the original traditional asset management business. This is also the first time that the Hong Kong subsidiary of a leading Chinese fund company has been approved.
According to Tencent Financial Report, after the Hong Kong Securities Regulatory Commission will approve the first batch of Bitcoin spot ETFs on April 15, the Hong Kong Stock Exchange will need about 2 weeks to prepare for product listing, etc., but the entire Bitcoin spot ETF project had detailed communication and plans with the Hong Kong Stock Exchange in advance. The Hong Kong Securities Regulatory Commission originally planned to list Bitcoin spot ETFs in Hong Kong around April 25, at the latest at the end of April.
Market participants judged that if a subsidiary in Hong Kong applies for a Bitcoin ETF product, it will further prove the maturity of its operation and market development potential. It is not ruled out that more leading public investors will use Hong Kong subsidiaries to set up the Bitcoin business.
Noel Atchison, a writer for cryptocurrency newsletter Crypto is Macro Now, said that the Hong Kong financial authorities' approval to launch a cash Bitcoin ETF may trigger a strong rebound in Bitcoin prices, and spot is more efficient in terms of taxes and costs. It will attract a wider range of participants. Asian cryptocurrency exchanges surpass the US market, and it would be huge if a small group of Chinese investors could legally invest in Bitcoin.
After the Bitcoin spot ETF, the enhanced version is also here
The frenzy surrounding the launch of Bitcoin spot exchange-traded funds (ETFs) has not subsided, and Wall Street launched leveraged and shorting ETF products at the beginning of the month, once again igniting the enthusiasm of the market.
ProShares, a well-known financial product issuer, has launched$PROSHARES TRUST ULTRA BITCOIN ETF (BITU.US)$und$PROSHARES TRUST ULTRASHORT BITCOIN ETF (SBIT.US)$. The former aims to track the 2x daily earnings performance of the Bloomberg Bitcoin Index, while the latter tracks the index's decline.
ProShares's new ETF product can be viewed as an enhanced version of the Spot Bitcoin ETF, which can provide amplified returns around spot Bitcoin. The market believes that the huge inflow of capital into the ETF sector highlights investors' enthusiasm for spot Bitcoin ETFs, and also reflects the growing popularity of ETFs as a frictionless trading tool.
What are the investment opportunities in the Hong Kong and US stock markets?
In the Hong Kong stock market,$Samsung Bitcoin Futures Active ETF (03135.HK)$,$CSOP Bitcoin Futures ETF (03066.HK)$The money-making effect has also increased this year, with a cumulative increase of more than 60%.
Bitcoin's money-making effect has attracted capital inflows, and the asset size (AUM) of these two ETFs has risen sharply.
Meanwhile, in the US stock market, the previous article《Cryptocurrency Milestone! The US SEC approves a Bitcoin spot ETF. What do you think of the related concept stock market in the future?》Some Bitcoin concept stocks were also given as examples.
However, it is worth noting that in this wave of growth since this year, Bitcoin spot ETFs and Bitcoin trends are highly consistent, but since the end of February, the trend of Bitcoin mining stocks has been weak.$Marathon Digital (MARA.US)$,$Riot Platforms (RIOT.US)$The cumulative decline was more than 43%,$CleanSpark (CLSK.US)$The cumulative decline was nearly 28%.
However, in response to this, analysts believe that with the advent of a new Bitcoin bull market cycle, strong inflows of ETF funds, and active expansion of mining machine production capacity, etc., Bitcoin miners are attractive to stock investors seeking risk exposure to the cryptocurrency cycle.
Bitcoin miner revenue rose to $2.01 billion in March, a record high of 44.9%. According to CryptoQuant data, on March 7, the daily revenue of miners reached 78.6 million US dollars, exceeding the peak set in April 2021 during the previous crypto bull market.
Komo said that the hash rate of the Bitcoin network is the next focus of attention. After halving, the hash rate is likely to drop by 20% immediately, mainly due to less efficient rigs exiting mining due to unprofitability.
Matthew Sigel, head of digital asset research at VanEck, also believes that the halving event will generate winners and losers. It said that unprofitable miners will disconnect from the network and hand over their shares to miners with low-cost electricity. It says,
As the balance sheets of listed Bitcoin miners such as Marathon Digital and Riot Platforms have improved, this will put some pressure on the market as they control about 25% of the global hash rate.
Bernstein, the top Wall Street investment bank, raised CleanSpark's target share price from $14.20 to $30 and maintained a rating superior to the market; raised MarathonDigital's target price from $14.30 to $23; lowered RiotPlatforms' target share price from $22.50 to $22, and gave the stock a rating that outperformed the market.
It's worth noting, however, that despite recent optimism, the nine most watched companies in the cryptocurrency sector had short positions accounting for 16.73% of their total issued shares, more than three times the US average, including as shadow shares of Bitcoin$MicroStrategy (MSTR.US)$Short positions account for 22.9% of its total number of issued shares.
However, BTIG analyst Andrew Harte believes that for now, the likely Bitcoin halving event in April should be a positive catalyst for Bitcoin itself and MicroStrategy's stock price. It said that the premium investors are willing to pay for the company's Bitcoin exposure “has reached a new normal of more than 2 times.” Analysts further explain the risks to MicroStrategy's upside and downside scenarios. He estimated,
If the premium shrinks and regulatory pressure hits the cryptocurrency market, Bitcoin may fall back to $48,000, and the stock price will drop to $700. However, in a bull market scenario, Bitcoin is expected to soar above 90,000 US dollars, and the stock price will also rise to 2,700 US dollars.
Furthermore, since the introduction of Bitcoin, the price has fluctuated and plummeted, and sharp rises and falls are the norm, and investors facing the market need to pay attention to the multiple risks they face.
Editor/Somer
