Hope versus Reality
And here we are, with the long-awaited approval of the Bitcoin ETFs. Many hoped that the king of the crypto market would now ascend gloriously, but unfortunately the reality turns out to be completely different. The price has indeed started moving, but unfortunately in the other direction. Bitcoin has fallen in a correction. And that turns out to be an unexpected and disappointing turn for many.
Anyone who has been trading in crypto for some time is not immediately shocked or panicked, but perhaps somewhat surprised. It may raise some questions. Could we have foreseen this downward movement? And what does this mean for the future of Bitcoin and the broader crypto market?
Personally, I never had high expectations for the arrival of ETFs. That doesn't mean I didn't have and still don't have hope that a turning point in crypto history has occurred here. My approach at the moment is to monitor the market daily and respond to what is happening if necessary. But honestly, this has more to do with my own financial situation than any well-thought-out strategy. If it were a strategy, it would probably be a pretty bad one. But let's not talk about me; let's delve into the developments of the Bitcoin price and try to understand why it has moved in the opposite direction of what many had hoped.
Buy the News, Sell the Event
Is there an explanation for this unexpected turn? Yes, there is. You could attribute this to a delayed response of “Buy the news, Sell the event.” What may be even more worrying is that Bitcoin, in search of liquidity, could fall even further to levels of 35 or even 33 thousand USD. A scenario that few had hoped for or expected.
How many times have we heard about "Institutional Money"? But so far it doesn't seem like this flow of institutional money is very beneficial for us. Logically we can understand that. Institutions are not there to line our pockets, but theirs. It is better for them if they can buy Bitcoin as low as possible. And that sometimes makes me wonder whether our hope for a positive boost from institutional money has ever been realistic?
Different Goals
It seems that the institutional players do not have the same goals as the individual investors. They have their own interests and strategies. And anyone who thinks logically knows this too. If you expected them to act in the interests of the small trader, you were wrong all along. The financial world is tough. The law of supply and demand is the only law that matters there, and that also applies to the world of crypto. These big boys can suddenly create a lot of demand, but they can also suddenly generate a lot of supply. They are big boys and they did not grow up by taking small private individuals into account
The crypto community has always been enthusiastic about the idea of “Institutional Money”. I have often heard people say that an explosive rise in the Bitcoin price was then guaranteed. Unfortunately, we can now say that we can see with our own eyes that reality is a bit more complex.
New Dynamics
As it looks now, the first quarter of 2024 could be an exciting period. You could say that we are now entering a period in which the market must adapt to a new dynamic created by the adoption of ETFs and the behavior of the big boys. But 2024 has only just begun. Bitcoin's halving is scheduled for sometime in April this year, and historically that is much more important for the price. So let's not get depressed about what's happening now. We have already seen and experienced much more. This volatility is only temporary.
It is important to remember that the approval of these ETFs is just one step in the evolution of the crypto market. And yes, it may take some time before the real impact of this becomes visible. Personally, I think we are really dealing with a belated "Buy the News, Sell the Event" response. Although I have also read that many of the sales come from Grayscale. And that could be possible, when the ETFs were announced in July 2023, the Bitcoin price was much lower than it is now! Which means that profits are being taken now, and the market will stabilize again once this wave has been processed.
As for a possible further drop in the Bitcoin price, I can only say: “I hope not,” but as always that is uncertain. No one can predict the price well. That has not changed with the arrival of ETFs. It has always been important to do your homework and keep a close eye on the market. This has not changed even after the arrival of ETFs.
Volatility
So you could say we might be at the beginning of a new chapter in crypto. And that often means volatility, which crypto is already known for. The crypto market already has had surprises in store for some time. Above all, let's do what we have already done in recent years, we simply bounce along toward an increasingly broader acceptance and further growth of crypto. How and when will this be? I seriously have no idea. Time will tell! But until then I'll do my thing and find my way, without too many expectations!
