Bitcoin ETF Launch Fails to Sustain Momentum as Price Drops
1min read Bitcoin's recent performance has raised questions about the impact of its spot ETF launch, which was initially seen as a game-changer for the crypto industry. The launch was expected to attract significant institutional investment, driving Bitcoin to new heights. However, since January 20, 2024, Bitcoin has struggled to maintain its upward momentum, leading to speculation that the market may have overestimated the immediate benefits of the ETF launch.
Historical market patterns offer some insights into Bitcoin's current trajectory. Analysts have drawn parallels between Bitcoin's ETF performance and the Nasdaq-100 ETF (QQQ) launched in 1999. The QQQ ETF reached its peak 54 weeks after its inception, a timeline that aligns with Bitcoin's peak 54 weeks post-ETF launch. This coincidence is notable, especially given that this peak coincided with the U.S. presidential inauguration, a potential macroeconomic turning point.
One of the key issues in this cycle has been the distribution of liquidity. The rise of memecoins has diverted capital away from Bitcoin and other established assets. Many retail investors were drawn into the hype of a “memecoin supercycle,” only to see most of these tokens collapse. This pattern mirrors previous speculative bubbles, where hype-driven assets briefly outperformed before erasing gains. Bitcoin dominance, which has climbed from 38% to 64%, indicates that capital is consolidating back into BTC as investors lose confidence in altcoins and opt for Bitcoin’s relative stability.
The role of ETFs in this cycle has also been a subject of debate. While they increase Bitcoin’s accessibility, they also raise concerns about long-term decentralization and institutional control over supply. The launch of Bitcoin spot ETFs was initially hailed as a major shift for the crypto industry, but the reality has played out differently. The market may have priced in perfection too soon, leading to a stalling of Bitcoin's momentum.
Historical market cycles provide another interesting perspective. The 1970s, a period of high inflation and economic uncertainty, saw two left-translated market cycles. A left-translated cycle occurs when a market peak happens early, leading to prolonged bearish conditions. If Bitcoin follows this pattern, we may see a sharp decline in Q1 2025, followed by a temporary relief rally in Q 