I spent some time analyzing the post-ETF Bitcoin charts today and came up with some rough price predictions for the next 3 months. Currently the ETF inflows lead to a 2% increase in price per day, which is about $1000 per day. Most of the increase is taking place during the settlement period before US market opening.
It seems to me that you can trade that ‘market inefficiency’. More important, I believe you can predict this daily price increase by looking at the inflows that are announced a few hours before that.
At current prices inflows are 10-12 times of newly created BTC, meaning that people have to sell their BTC in order to fill the ETF orders. They will only do that at higher prices, because hardly anybody who looks at this market would think BTC is peaking. Higher prices lead to more FOMO among ETF investors, leading to more demand and even higher prices.
Two other events that will happen in the next 3 months are important:
1) The halving of the BTC mining rewards in mid April. Right now 900 BTC are produced per day, but after that only 450 new coins are mined. This will add to the supply shock and will lead to even higher prices
2) Many financial advisors can only start selling a new ETF after 90 days of trading (to minimize the risk that an ETF they sell will fail), meaning by early May demand should start picking up even more.
What will this mean for the price? I think we are in uncharted territory here, but I believe an average increase of $1000 per trading day over the next weeks is very likely. After the 2 events above this could even be substantially higher. This means that unless there is a black swan event we will see a new all time high (> 69K ) before the halving and we could possibly hit $100K in the next 2-3 months already.
It seems to me that you can trade that ‘market inefficiency’. More important, I believe you can predict this daily price increase by looking at the inflows that are announced a few hours before that.
At current prices inflows are 10-12 times of newly created BTC, meaning that people have to sell their BTC in order to fill the ETF orders. They will only do that at higher prices, because hardly anybody who looks at this market would think BTC is peaking. Higher prices lead to more FOMO among ETF investors, leading to more demand and even higher prices.
Two other events that will happen in the next 3 months are important:
1) The halving of the BTC mining rewards in mid April. Right now 900 BTC are produced per day, but after that only 450 new coins are mined. This will add to the supply shock and will lead to even higher prices
2) Many financial advisors can only start selling a new ETF after 90 days of trading (to minimize the risk that an ETF they sell will fail), meaning by early May demand should start picking up even more.
What will this mean for the price? I think we are in uncharted territory here, but I believe an average increase of $1000 per trading day over the next weeks is very likely. After the 2 events above this could even be substantially higher. This means that unless there is a black swan event we will see a new all time high (> 69K ) before the halving and we could possibly hit $100K in the next 2-3 months already.