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⚡BTC and ETH Prices Soar🪁

Croxroad

16 Apr 2024 — 4 min read

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🇭🇰 Crypto Bulls Rejoice

Bitcoin (BTC) has experienced a notable surge of 2.8% within a 24-hour period, reaching a trading price above $66,500, while Ethereum (ETH) has also seen gains, climbing to $3,240, as reported by CoinDesk Indices data. This upward momentum comes in the wake of multiple issuers in Hong Kong announcing their approval for spot crypto exchange-traded funds (ETFs).

China Asset Management, alongside Bosera Capital and other applicants, took to the social-media platform WeChat (Weixin) to disclose their approval for listing spot bitcoin and ether ETFs in Hong Kong. However, these declarations appear to have preempted an official statement from the Securities and Futures Commission (SFC), which has yet to release a list of approved issuers. Several of the posts announcing approval have been subsequently removed, and attempts to reach the SFC for comment have been unsuccessful.

In response to these developments, Singapore-based digital assets trading firm QCP Capital shared insights with CoinDesk, suggesting that the anticipated approval of these ETFs could potentially unlock institutional demand during Asian trading hours. QCP Capital emphasised the significance of this approval, stating that it provides institutional investors with an alternative within the Asian market, which was previously limited to exposure during U.S. trading hours. Despite short-term bullish sentiments surrounding this news, QCP Capital also highlighted the presence of broader narratives and drivers, particularly macroeconomic events, which may exert influence on the market in the long run.

⚠️ Bitcoin's Post-Halving Challenge

A looming challenge threatens the stability of Bitcoin (BTC) in the months following its upcoming halving event, warns market analyst Markus Thielen of 10x Research. Thielen projects a potential outflow of $5 billion worth of BTC from miners post-halving, a scenario reminiscent of previous cycles. According to Thielen's calculations, this selling pressure could persist for four to six months, possibly leading to a sideways movement in Bitcoin's price.

The historic data supports Thielen's assessment, as evidenced by Bitcoin's price stagnation between $9,000 and $11,500 in the five months post-2020 halving. With the 2024 halving scheduled around April 20, market participants may not witness significant upward momentum until October, should history repeat itself. Thielen emphasises that miners typically accumulate BTC leading up to the halving, causing a supply-demand imbalance and a subsequent price rally.

However, Thielen also predicts repercussions for altcoins, particularly in light of their recent declines and distance from 2021 peaks. Despite speculation about a potential altcoin rally correlated with the halving, historical evidence suggests a delay of almost six months before such rallies commence. Notably, Marathon, the world's largest Bitcoin miner, has strategized to gradually sell its inventory post-halving to avoid revenue setbacks. Thielen estimates that Marathon alone could flood the market with an additional 14-15 BTC per day after the halving.

Thielen's analysis underscores the delicate balance in the post-halving period, highlighting the necessity for miners to adapt strategies to remain profitable. Marathon CEO Peter Thiel echoes this sentiment, indicating a break-even rate of $46,000 per BTC post-halving for the firm's sustainability. Amidst these projections, market observers brace for potential turbulence in the months ahead as Bitcoin navigates the aftermath of its halving event.

🎓 Understanding Your Capital Losses

Capital losses occur when you sell an asset for less than its purchase price. While this may seem unfavourable, capital losses can be advantageous for tax purposes. You can use them to offset capital gains, including those from non-crypto assets like stocks, dollar-for-dollar. This can potentially reduce your overall tax liability.

If your losses exceed your gains or if you have no gains at all, you can deduct up to $3,000 of losses per year to offset other income. Any remaining losses can be carried forward to future years until fully utilised. This provides flexibility and can help minimise your tax burden over time.