Bitcoin (BTC) Halving in the Second Quarter: The $100,000 Is Still in Sight by the End of the Year

The second quarter was not great for bitcoin, but the outlook is clearing. The $100,000 still in sight by the end of the year.

Bitcoin had a rough second quarter, but the outlook is improving. The $100,000 target is still in sight by year-end.

FUD is fading away

Bitcoin fell by 25%, dropping from $71,000 to $53,000. In percentage terms, this is the biggest drop since February.

After rising by 69% in Q1, bitcoin fell by 13% in Q2. Despite this correction, it remains the best performing asset class year-to-date (+55%).

The fourth halving was the main event of the quarter, and its impact on the market was positive. The impact was not immediate, of course. However, in the long run, it is the equivalent of 450 BTC being bought every day and never sold.

As we recently covered, bitcoin sales linked to the German government and Mt. Gox prompted traders to hedge. The shift in market sentiment was evident in ETF flows.

The chart below shows that net flows into ETFs slowed down in Q2, reaching $2.5 billion compared to $12.1 billion in Q1.

We can observe net outflows starting early June — that is, when the old issue of Mt. Gox resurfaced, along with the German government:

Net ETF inflows became positive again once the German government sales (50,000 BTC) were completed. Cumulative ETF investments have returned to an all-time high.

As expected, the distributions in the Mt. Gox bankruptcy case (142,000 BTC) did not tank the market. More than 65% of creditors have now been paid back without observing any massive sales. Around 90,000 BTC still need to be distributed, according to Arkham, which is roughly $6 billion.

China, the United States, and Bitcoin

The outlook is clearing, and the upcoming US presidential election is already a very good sign for bitcoin.

Once skeptical, the former US president has finally changed his stance. The price of bitcoin even increased by nearly 10% following the assassination attempt over the weekend.

His speech at the Bitcoin conference in Nashville, which will take place from July 25-27, promises to be explosive!

Also of note, his running mate James Vance revealed in 2022 that he held between $100,000 and $250,000 in bitcoins…

Another reason to be optimistic is that the CEO of BlackRock — the world’s largest investment fund — continues to praise bitcoin.

“I did my homework. The opinion I had of bitcoin five years ago was not the right one. I now think that bitcoin is legitimate […]. It is a legitimate financial instrument […]. It is an instrument one invests in when fearful, when their country devalues money due to excessive budget deficits. It allows investing in something outside the control of your government. I firmly believe that bitcoin has a place in a financial portfolio. […] I see bitcoin as digital gold”, he told CNBC.

All that remains is to convince Xi Jinping of its merits. This will be difficult as long as China refuses to lift its capital controls. Indeed, no one can prevent bitcoin transactions.

We could imagine that the United States might accept bitcoin becoming the international reserve of value if China agrees to open its financial borders. There would then be no reason to maintain the stigma on bitcoin.

The authorization of bitcoin-backed ETFs in Hong Kong is an optimistic sign.

Bitcoin, geopolitical, economic and energy journalist.