Rebound Signals for Second Half Emerge... What Could Ignite the 'Stagnant' Bitcoin? [Bitcoin Now]

Plunged Nearly 50% Due to Liquidity Contraction
Rebound Expected in Second Half After Fourth Halving Ends
Strategy Accelerates Bottom Fishing; Increase in Long Futures Positions

There are forecasts that Bitcoin (BTC), which has been gradually declining and moving sideways since reaching its all-time high last October, will rebound in the second half of this year. These optimistic predictions are mainly attributed to the end of the halving cycle—which forcibly reduces supply—and the ongoing institutionalization of digital assets.

As of 3:51 p.m. on March 30, Bitcoin was trading at 101,998,000 won on the Bithumb cryptocurrency exchange, up 1.61% from 24 hours earlier. In October last year, Bitcoin reached a record high of 179,734,000 won per coin, but by early February this year, it had dropped to a low of 81,110,000 won. This marks a steep decline of 55% from its peak. Since then, the price has been fluctuating between 95,000,000 won and 110,000,000 won.

Why Did It Fall? "Liquidity Tightening"

The reason behind the drop in Bitcoin’s price at that time was a reduction in liquidity. In 2024, after the U.S. Securities and Exchange Commission (SEC) approved spot exchange-traded funds (ETFs) based on Bitcoin, the influx of ETF funds drove up Bitcoin’s price. Additionally, Bitcoin’s inherent characteristic—the halving—entered its fourth phase in April 2024, further intensifying the supply shortage. The halving is a mechanism that enforces a supply cap to control inflation. Bitcoin is designed so that the mining reward is halved every time 210,000 blocks (a ledger grouping transactions over a certain period) are generated. At each stage, block rewards decrease sharply, slowing the pace of new supply.

However, since the end of last year, downward pressure on prices has increased due to weaker demand from new buyers, as the net inflow into ETFs started to slow. According to statistics from financial information platform Farside Investors, the net cumulative inflow into spot ETFs had steadily increased until it reached 62.727 billion dollars (approximately 94.09 trillion won) in October last year, but then decreased to 53.787 billion dollars. This drop in cumulative value means that actual funds have flowed out. Additionally, in January, the U.S. Federal Reserve reaffirmed its stance not to rush interest rate cuts, strengthening expectations for a prolonged period of high rates. As a result, capital moved toward safe assets such as U.S. Treasury bonds, and investment funds in relatively risky assets like digital assets flowed out.

Second Half of This Year: Halving Cycle Ending and Strategic Asset Adoption by Countries as Positive Factors

Nevertheless, there is a growing assessment that Bitcoin’s price has reached a “bottom,” with speculation that a rebound could start as early as June. Junho Lee, a researcher at Hana Securities, stated in a recent report titled "The Brave New World Brought by AI Agents and Tokenized Economies," “We expect a strong performance for digital assets, including Bitcoin, in the second half of this year.” He cited the end of the halving cycle and the acceleration of countries adopting Bitcoin as a strategic asset as reasons for the anticipated rebound. Lee noted that, although both the upward and downward moves in this halving cycle have been limited compared to previous cycles, the overall pattern remains similar. He emphasized, “In previous cycles, the adjustment period lasted about 360 days, while the lowest point in the current cycle formed at 123 days.” In other words, 240 days after early February, a rebound is expected to begin.

Furthermore, countries are increasingly moving to adopt Bitcoin as a strategic asset. The United States, for example, currently holds 320,000 Bitcoins seized during criminal investigations, and Senator Cynthia Lummis has proposed a bill to purchase 200,000 Bitcoins annually. In Brazil, a bill has been submitted to secure 1 million Bitcoins over five years.

The investment banking industry is also predicting a bullish market. James Yarrow, an analyst at Goldman Sachs, said, “In the current cycle, Bitcoin’s decline has nearly reached the average drop from peak to trough seen in previous cycles. Typically, digital asset trading volumes show a meaningful rebound after about three months at the bottom.” Bernstein, in a report released on March 25 (local time), also noted that institutional demand through ETFs has supported the market even during the adjustment phase, resulting in early-year outflows reversing into inflows. Bernstein predicted, “Bitcoin has reached its bottom and will rise to 150,000 dollars by the end of this year.”

As a result, digital asset treasury (DAT) companies that boost corporate value through buying Bitcoin at low points are moving quickly. The world’s largest DAT company, Strategy, purchased 90,831 Bitcoins for the 13th consecutive week as of last week. During this process, the company also announced plans to raise 44.1 billion dollars for Bitcoin purchases. Investors are also showing a bullish sentiment toward Bitcoin. On the Bitfinex cryptocurrency exchange, the number of Bitcoin long (buy) positions has reached 79,343 contracts, the highest since November 2023. In the futures market, long positions reflect an expectation of rising prices.

This content was produced with the assistance of AI translation services.