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Bitcoin Halving and ETFs: How you can trade Bitcoin and Co with CapTrader

Summary:

  • "Bitcoin halving" takes place in mid-April 2024 and creates a kind of "artificial supply shortage"
  • Approval of the Bitcoin Spot ETF in January 2024 acts as a milestone in history and creates acceptance and trust
  • CapTrader offers you numerous instruments such as crypto shares, ETFs/ETNs or futures to participate in the performance of Bitcoin

The "Bitcoin Halving" could act as a key event in 2024

The "Bitcoin Halving" on April 20, 2024 is an important date on the agenda for crypto investors. This event could have a decisive influence on the price of Bitcoin (BTC) in 2024 and beyond.
The so-called "halving" in technical jargon ensures a kind of "artificial supply shortage", which takes place on average every four years.

From a technical perspective, the reward for verifying Bitcoin transactions will be halved, which will result in a reduction in the speed of the offer. The so-called "block reward" for "mining" bitcoins will fall from 6.25 to 3.125 BTC units. This means that instead of around 900 BTC after the Bitcoin halving, around 450 BTC will be created per day. According to the Bitcoin code, there can be a maximum of around 21 million Bitcoin units in the ecosystem. In this context, investors are hoping not least for a store of value with deflationary properties.

The last Bitcoin halving took place on May 11, 2020. In this context, the block reward for miners was reduced from 12.5 to 6.25 Bitcoin (BTC).

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Approval of Bitcoin spot ETFs as a milestone in the history of Bitcoin and Co

In addition to the Halving Event 2024, the first approval of so-called Bitcoin spot ETFs on US land on January 10, 2024 has been one of the main topics of discussion since the beginning of 2024. Just one day later, a total of eleven ETF investment vehicles based on spot prices were launched, including by the world's largest asset manager BlackRock.

Private investors and, above all, institutional investors in the United States have simplified access to Bitcoin and no longer have to deal with the technical finesse and risks of buying and selling Bitcoin along with the safekeeping of the "private key". Retail investors have already been able to invest in crypto assets in many ways. However, institutional addresses such as hedge funds or family offices were denied access.

The approval of Bitcoin spot ETFs by the US Securities and Exchange Commission (SEC) in January 2024 has given the crypto industry further acceptance and thus more than a pinch of respectability.

Opportunities and risks after the Bitcoin halving

After the Bitcoin halving, there are potential downside risks for Bitcoin. The so-called Bitcoin miners could be forced to get rid of their Bitcoin holdings for reasons of profitability in order to cover running costs. As halving leads to a reduction in the block reward, the production costs for Bitcoin miners could increase on balance. However, this could be mitigated by a reduction in difficulty.

Since October 2023, investors are likely to have acted in line with the stock market adage "buy the rumor, sell the news" with regard to the approval of a Bitcoin spot ETF, which increases the potential for a correction on the other side. Investors may simply have been afraid of missing out. The "fear of missing out" phenomenon has repeatedly led to market exaggerations in the past. The Bitcoin halving, the launch of Bitcoin spot ETFs and the prospect of interest rate cuts in 2024 could act as key influencing factors in 2025. Falling interest rates should tend to increase the attractiveness of interest-free investments compared to fixed-income securities such as US government bonds. Despite a positive market environment, investors should not neglect downside risks.

Bitcoin halving in the table: date, amount and rewards of the blocks

EventDateBlocksBlock reward in BTC
Bitcoin - IntroductionJanuary 03, 2009050
1. halvingNovember 28, 201221000025
2. halvingJuly 09, 201642000012,5
3. halvingMay 11, 20206300006,25
4. halvingExpected for April 20, 20247400003,125
5. halvingExpected in 20288400001,5625

Implementation options with CapTrader: Futures, ETFs, ETNs and shares

The tradable range of implementation options to efficiently participate in the performance of Bitcoin and other crypto assets at CapTrader is diverse, even if no physical crypto assets are tradable to date. These range from so-called ETFs or ETNs to crypto-sensitive shares and futures.

  • Crypto ETFs and ETNs

Crypto ETFs and ETNs give you the opportunity to trade without the technical challenges and risks associated with physical buying and selling.
While ETFs stand for (exchange-traded funds) and function as exchange-traded funds, ETNs (exchange-traded notes) are exchange-traded bearer bonds that are based on the price of the underlying asset and are replicated 1:1. Physically backed ETNs are similar in structure to ETFs, but the issuer's debt instruments are not separated.

You can find an overview of the various products here.

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Why are US Bitcoin ETFs not authorized in the Federal Republic of Germany?

To date, US Bitcoin ETFs have not been allowed in Europe, as the sale of US ETFs would not comply with local transparency requirements. Last but not least, the UCITS Directive in Europe prohibits the issue of ETFs with only one asset due to a lack of diversification.

  • Bitcoin and ether futures

Via a Bitcoin future, you can participate 1:1 and thus directly in the price development of Bitcoin (BTC). CapTrader also offers the equivalent for "Ether (ETH)", the second most important cryptocurrency in terms of market size.
The products can be traded in various sizes and are therefore also aimed at investors with less highly capitalized accounts.
An overview of the various products with ticker, contract size (tick size) and trading hours can be found at here.

  • Future options

As a counterpart to futures trading, CapTrader offers you so-called crypto futures options, which can be traded on all crypto futures contracts listed with the CME Group. Further information can be found at here.

  • Crypto shares

Crypto shares can be an alternative to the trading products listed above. As a rule, these have a high correlation to the price performance of Bitcoin. At the same time, investors in securities may also be able to look forward to dividends.

Important notes on Bitcoin ETFs from the USA

In order to trade US ETFs, you must qualify as a "professional client".
You must be able to prove two of the following three criteria:

  • You own half a million euros in assets.
  • You can provide evidence of trades with a volume of 50,000 euros in the financial sector.
  • You have a professional background and are therefore particularly knowledgeable within the financial sector, which qualifies you.

More articles on this topic

Timo Emden in a dark suit and tie poses in front of a plain gray background and looks neutrally into the camera.
Timo Emden

Timo Emden holds a B.A. in Business Administration, is a market analyst and a certified blockchain expert from the Frankfurt School of Finance & Management. He has been following the global financial markets for over 14 years, with a focus on crypto assets. His assessments are based on chart technology and sentiment - he nevertheless considers important fundamental events to be significant. As a market expert, Mr. Emden is a valued contact for TV, press and radio.

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Historical observations and forecasts are not a reliable indicator of future developments. The facts presented in particular in connection with product information are for illustrative purposes only and do not permit any statements to be made about future profits or losses. Any conditions stated are to be understood as non-binding indications and are dependent on market developments on the day of conclusion.

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The information, opinions and statements correspond to the status at the time of preparation of the marketing communication. They may be outdated due to future developments without the publication being changed.

CapTrader is not obliged to update, amend or supplement the information if a circumstance mentioned in this publication or a statement, estimate or forecast contained therein changes or becomes inaccurate. The presentation of the performance of financial instruments over previous periods does not provide a reliable indication of their future performance. No guarantee can therefore be given for the future price, value or income of any financial instrument mentioned in this publication.

Despite careful control of the content, we assume no liability for the content of external links. The operators of the linked pages are solely responsible for their content.

Distribution: This publication may only be distributed in accordance with the laws of the respective countries, and persons in possession of this publication should inform themselves about the applicable local regulations. The information contained herein is not intended for natural or legal persons who, due to their place of residence or business, are subject to a foreign legal system that imposes restrictions on the distribution of such information. The contents are therefore exclusively in German. In particular, this publication contains neither an offer nor an invitation to purchase securities to citizens of the USA, Great Britain and Australia.

Taxes: The tax treatment of financial instruments depends on the personal circumstances of the respective investor and may be subject to future changes, which may also have a retroactive effect.

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