Spot Bitcoin ETFs have crashed into a bear market this year as they declined by over 20% from their all-time highs. Blackrock’s IBIT has tumbled to $45, while Fidelity’s FBTC and Ark Invest’s ARKB have fallen to $70 and $80, respectively.
These ETFs have fallen and suffered significant outflows in the past few months. IBIT now has about $47 billion in net assets, while FBTC and ARKB have $15 billion and $3.7 billion, respectively. Grayscale’s GBTC has $15.5 billion. Here are the four main reasons why one should buy or dollar cost average (DCA) spot Bitcoin ETFs.
Top 4 reasons to buy or DCA IBIT, FBTC, and ARKB
There are several key reasons why you should consider buying these spot Bitcoin ETFs: Bitcoin still has strong fundamentals, BTC has moved into a bear market before, and a recession is a good thing for crypto.
Bitcoin price has crashed into a bear market before
The first main reason why one should consider buying spot Bitcoin ETFs is that this is not the first time that Bitcoin has plunged into a bear market before. For example, it dropped by 32% from its highest point in March to its lowest point in August last year.
Bitcoin also crashed by over 77% from its highest level in 2021 and its lowest point in 2022. There have been many similar crashes in the past.
This means that Bitcoin’s surge to a record high of over $109,300 this year has not been a linear situation. The coin has had several highs and lows, meaning that this one will also be temporary.
BTC has strong fundamentals
Second, Bitcoin has strong fundamentals that may push its price higher in the long term. The most important fundamental is its demand and supply.
Bitcoin, unlike other assets, has a fixed supply of 21 million tokens. Millions of these coins have been stolen, while the current circulating supply stands at over 19.83. This means that Bitcoin miners are now fighting for just 1.17 million coins.. Not all these 1.17 million coins will be mined as the cost will be so high.
At the same time, Bitcoin executes halving every four years, which increases the mining difficulty. All this will happen at a time when investors are buying these assets, with all spot Bitcoin ETFs bringing in over $35 billion in inflows. Therefore, these fundamentals will keep supporting Bitcoin ETFs like IBIT, GBTC, FBTC, and ARKB.
Read more: Crypto crash triggers $1 billion in liquidations: time to buy the dip
Bitcoin price break and retest pattern
The other reason why the IBIT, FBTC, and ARKB ETFs will do well is that Bitcoin is simply doing a break and retest pattern, a popular continuation sign. This is a situation where an asset crosses a key resistance and then retests it. In this case, it crossed the resistance at $73,600 a few months ago, and is now dropping to retest it. This resistance is notable since it was the highest level in March last year.
BTC price chart | Source: TradingView
Recession is a catalyst for Bitcoin ETFs
The other potential catalyst for spot Bitcoin ETFs is that the US may go through a recession this year because of Trump tariffs and the upcoming government shutdown.
A recession is a good catalyst for cryptocurrencies because it leads to lower interest rate cuts by the Federal Reserve.
Bitcoin and all altcoins surged during the pandemic as the Federal Reserve slashed interest rates to zero. Similarly, the stock market surged after the Global Financial Crisis (GFC) after the Fed slashed rates and implemented quantitative easing (QE).
QE is a situation where the Federal Reserve prints cash and invests in government bonds and mortgage-backed securities. Crypto and other risky assets do well when the Fed is cutting rates and implementing QE.
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