Bitcoin (BTC) has seen
a 2.5% increase to $43,000 this week, while Ethereum (ETH) gained 3.7% to
$2,388. The rise was even higher on Tuesday, at 4.6% and
5.7%, respectively, before prices rolled back later.
Investors are discussing positive developments
in the crypto market. Firstly, there is satisfaction with the slowdown of
capital outflow from the Grayscale spot Bitcoin ETF (GBTC). The series of 11
weeks of capital outflows was interrupted by an inflow of $183 million (4,200
BTC). While this is not enough to cover the outflow from GBTC entirely, it
doesn't necessarily mean investors are pulling away from Bitcoin. On the
contrary, whales holding 1,000 BTC have continued to accumulate the major
cryptocurrency throughout January, increasing their stakes by $3 billion
(76,000 BTC). The same trend is seen in futures ETFs, with ProShares Bitcoin
Strategy ETF (BITO) experiencing $242.5 million in capital inflows in January.
Moreover, the fund saw only one week out of four consecutive weeks of net
outflows, and over the last 15 weeks, there were outflows only during three
weeks.
This aligns with forecasts from institutional
investors like Morgan Stanley about a "potential paradigm shift" in
the global financial system after the approval of the first spot Bitcoin ETFs
by the U.S. Securities and Exchange Commission (SEC). Several de-dollarization
threats may significantly increase capital inflows to BTC and other crypto
assets.
Standard Chartered has released a forecast for
Ethereum, suggesting it may rise by 72.0% to $4,000 by the end of 2024 if spot
Ethereum ETFs are approved by the SEC. The bank had previously forecasted BTC
prices to surge to $120,000 by the end of the year. It envisions the SEC
approving the first spot ETH ETF by May 26, 2024.
Meanwhile, the Harvest Fund has filed a spot
Bitcoin ETF application in Hong Kong. If approved, this would provide investors
in China with legal access to invest in Bitcoin.
Despite these positive developments, investors
should exercise caution due to short-term elevated volatility. If BTC survives
above $42,557 by the end of the month, January will mark the fifth consecutive
month of growth for the major cryptocurrency. However, historical trends
suggest prices could drop in February before recovering during the pre-halving
rally. So, it could be better to join the rally in March.