We have set the clock forward an hour, the sun is shining, spring has sprung and most of the Easter eggs have been found. This means that we can close the first quarter of 2024 and start in April. In this article we check what you can expect from the second quarter.
The crypto market is set for an exciting second quarter with two major events: the Bitcoin halving and a possible decision on spot ether ETFs.
Halving can lead to scarcity
The halving, which is expected to take place in mid-April, could lead to a significant price increase. Previous halvings were accompanied by strong price developments.
Bitcoin has a fixed maximum supply. The halving, which halves the amount of new Bitcoins created, could lead to scarcity. That can drive up the price. Currently, the demand for Bitcoin already exceeds the supply. This can cause large price fluctuations in the long term.
What does the Central Bank of America decide?
Whether expectations come true this time largely depends on the American central bank, the Federal Reserve. It hinted at interest rate cuts at the end of last year, but recent inflation figures have thrown a spanner in the works. If interest rates do rise, it could significantly dampen Bitcoin’s celebration.
Inflation has risen slightly and is above the target of 2 percent.
Impact of ETFs
In any case, the first three months of 2024 were excellent for the Bitcoin price. The value increased by about 66%. After a short-lived dip, the price is still 13% higher in March. Historically speaking, Bitcoin often performs well in the second quarter anyway. Over the past eleven years, Bitcoin closed the second quarter up no less than seven times.
A major reason for the recent increase is the arrival of spot Bitcoin ETFs in the United States. These funds make it easier for investors to invest in Bitcoin. The demand for Bitcoin has increased significantly as a result.
In May, the American regulator, the SEC, can make a decision on spot ether ETFs. If approved, this could create additional demand, just like with Bitcoin. However, expectations are divided.
