Could Bitcoin Rise to $500,000? Crypto ETFs to Consider

Bitcoin has been somewhat volatile since receiving spot ETF approval in early January, making some investors nervous. After the approval, the cryptocurrency saw a dramatic initial rally, soaring 70%, but then lost steam in mid-March and has since fallen 14%.

However, despite the recent volatility, Bitcoin's outlook remains promising in both the short and long term.

Encouraging Signs from Historical Patterns

According to Motley Fool, the digital asset mirrors a four-year historical pattern, beginning with a bearish trend and then turning bullish in the final year. After experiencing a bear market, it recovers in the second year and sees a continued rise in the third year, with the cryptocurrency going through a halving process before reaching a cyclical peak.

If patterns continue, Bitcoin will experience a bear market in 2022, currently in its third year since the halving in April. While past performance is no guarantee of future results, extrapolating and leveraging Bitcoin's past performance can provide insight into what may happen in 2025, the fourth year.

Using historical patterns to predict Bitcoin prices

According to Motley Fool, in the third year after the halving occurs, Bitcoin will surge by an average of 125%, starting from $44,000 in early 2024 and hitting $100,000 by the end of the year.

Historical trends suggest that digital assets surge 400% on average in the year following a halving. If this trend repeats and Bitcoin finishes this year in line with its historical average, its price could reach around $500,000 by 2025.

Any favorable changes in the dynamics of supply and demand for digital currencies will increase the chances of price predictions coming true.

Inflow avalanche

According to Coindesk, July has historically been a bullish month for the digital asset, with the ETF seeing inflows of around $130 million on July 1. Data shows that over the past decade, Bitcoin has recorded an average gain of more than 11% in July, with positive returns in seven of the 10 months.

With the cryptocurrency's supply being suppressed by 50% since the halving in April, we are likely to see increased inflows into the Spot Bitcoin ETF in the coming months.

Federal Reserve cuts interest rates, raising prices

If the Fed cuts interest rates later in 2024, investors may view Bitcoin as a proxy for a weaker dollar that would move inversely to the Fed's interest rate adjustments. The increasing likelihood of the Fed cutting interest rates later this year, combined with dedollarization, tends to create opportunities for digital currencies.

Moreover, a rate cut by the Fed would increase risk-taking sentiment, which would in turn boost Bitcoin prices.

ETFs to consider

Below, we look at some ETFs that can help investors increase their portfolio's exposure to Bitcoin and take advantage of the long-term bullish trend.

IShares Bitcoin Trust Registered IBIT has risen 12.56% in the past month and 8.67% in the past three months.

Grayscale Bitcoin Trust GBTC has risen 14.03% in the past month and 8.41% in the past three months.

FidelityWise Origin Bitcoin Fund FBTC has risen 12.98% in the past month and 8.64% in the past three months.

ARK 21Shares Bitcoin ETF ARKB has risen 12.55% over the past month and 8.67% over the past three months.

Bitwise Bitcoin ETF Trust BITB has risen 12.56% in the past month and 8.70% in the past three months.

Want the latest recommendations from Zacks Investment Research? Download 7 Best Stocks for the Next 30 Days today: Click to get this free report.

What's Hot