While crypto has had some characteristic ups and downs over the past few months, experts are eying July for the likely return of the crypto bull market based on seasonal trends and a big opening day for the Bitcoin ETF market on July 1. Other factors tilting the scale include the approval of new crypto ETFs and the landmark approval of the landmark MiCA regulations in Europe.
The month started strong with Bitcoin ETFs posting $130 million in inflows on July 1, a particularly important figure when looking at the $900 million in outflows that took place over June.
Historically speaking, when Bitcoin experiences a slow June (with a median of 9.85% in losses), it tends to bounce back to recover its losses in July (with a median of 9.6% in gains), according to QCP Capital. In the past 10 years, Bitcoin has averaged 11% in returns for the month.
Overall demand for ETFs remains high, regardless of back-and-forth adjustments. Since the Bitcoin ETFs launched earlier this year, they’ve received a combined $14.64 billion in inflows. That level of investment and interest lends to the impact of the impending approval of Ethereum spot ETFs, which many analysts are expecting to occur after the July 4 holiday.
The approval of Ethereum spot ETFs will result in a significant level of investment in the crypto market as more and more major firms adopt them. Matt Hougan, Chief Investment Officer for Bitwise, predicts that Ethereum ETFs will see $15 billion of investment by the end of 2025 once approved. Bitcoin, meanwhile, could reach $50 billion by that same timeframe, buoyed by the onboarding of major platforms such as Merrill Lynch and Morgan Stanley.
It’s important to keep in mind that crypto ETFs have only been on the market for just over six months, meaning there’s no historical precedence to compare to with ETFs in the picture. With that said, crypto ETFs have been the fastest growing ETFs in history, even faster than gold.
We can learn some things from the launch of the first gold ETFs in 2004, which was said to have revolutionized the gold market by making it easier for the public to invest. The impact of the gold ETFs was momentous, lifting the price of gold more than 250% by 2011. Some investors believe that Bitcoin could see a similar gain within the next few years based purely on ETF investments. It took three years for gold ETFs to attain $10 billion in assets – meaning Bitcoin ETFs have already outpaced it in half a year’s time.
Apart from the upcoming launch of Ethereum ETFs, Solana is looking at being the next major cryptocurrency to have its spot-ETF application approved. Investors are excited enough about the prospect that they helped lift the coin higher than all other major coins last week. Solana’s ETF approval is expected to boost it by as much as 900%.
It’s not just the ongoing ETF storm that has investors looking at a bullish July. On June 30, the EU approved Markets in Crypto-Assets Act (MiCA), being the first major regulation surrounding stablecoin issuers. It’s viewed as good news by the crypto industry, which has been asking for clarity surrounding regulation for years. While it may still be some time before the US gets its own regulatory framework in order, having the EU take the lead with MiCA is setting a precedent that other major markets can’t ignore.
Put it all together, and the signs are favorable for this July to continue the month’s historically upward trend – pointing the way for a bull market for cryptocurrencies across the board.
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