Is bitcoin entering a new growth cycle. The effects of this transition has been accelerated by recent halving events, a surge in investment interest towards spot Bitcoin ETFs, and the evolving landscape of global economics. These factors are all playing a part in fostering a bubbling sense of optimism within the crypto world. The confluence of these structural and macroeconomic forces signals a potentially very bullish outlook for Bitcoin.

The Halving Effect and ETF Inflows

A major structural factor driving this renewed optimism is April 2024’s Bitcoin halving event. Historically, we’ve seen the price of Bitcoin increase 6 to 12 months after every halving in the last three cycles. Each halving, which occurs every four years, halves the daily issuance of new Bitcoin. This reduction obviously puts upward pressure on prices as the rate of supply growth moderates.

Contributing to this positive momentum are the renewed inflows into spot Bitcoin ETFs. On April 17, those total net inflows into U.S.-listed Bitcoin ETFs reached $106.9 million. This increase represents the largest amount we’ve seen in almost a month. This unprecedented wave of institutional investment is evidence of the increasing confidence in Bitcoin as a legitimate asset class.

Even more encouraging to institutional investors is how this rally has proved a sturdy answer to the recent correction from the $74,000 high in March. This can only mean one thing — they’re treating this as a long-term buying opportunity — an opportunity to double down on setting Bitcoin in stone as a financial mainstay.

Macroeconomic Pressures and Geopolitical Strategies

The first two of these pressures mainly reflect trends on the legislative front in China and the U.S. At least, that appears to be how China is making preparations for what looks to be a long-term period of economic discord with America.

"This isn’t just about hoarding precious metals; it’s a geopolitical strategy." - senior analyst at ANZ Bank

Renae Warner of Georgetown explains why Bitcoin is becoming increasingly important as a politically neutral asset. In today’s ever shifting landscape, this role is arguably more important than ever. This independence is drawing the interest of investors who, themselves, are looking for a safe haven from traditional financial markets and geopolitical uncertainty.

Robert Kiyosaki, the author of personal finance book “Rich Dad Poor Dad,” thinks Bitcoin will climb to $1 million by 2035. He, too, has echoed warnings of an impending recession – a quality that adds fuel to the case for Bitcoin and other non-correlated assets.

"A Great Depression is coming. Credit card debt, student loans, and national debt are exploding. Unemployment is rising, and pensions are going bankrupt. You should stock up on gold, silver, and Bitcoin before it’s too late." - Robert Kiyosaki

Market Risks and Future Outlook

Despite the optimism, risks remain. Benjamin Cowan, a top crypto analyst, warned against the extreme optimism and lofty price targets.

"Whenever markets bet on sky-high targets, they often underestimate the real-world risks." - Benjamin Cowen

If the price drops below $85,000, it might cause a long liquidation cascade which could send Bitcoin prices crashing down within a few hours. This is a manifestation of the extreme volatility built-in to the entirety of the cryptocurrency market and why risk management practices are paramount.

It is important to point out that Bitcoin started to get labelled as the new “digital gold” by institutional investors from around mid-2020. Over the years this perception has only continued to grow. It has leveraged in larger investments and increased its credibility as a valuable impact asset class.