Bitcoin is enduring a walloping in 2022, making the all-time high of $69,000 notched less than a year ago seem an eternity away. However, some market observers believe the largest cryptocurrency can regain lost luster in 2023.
Assuming that forecast proves accurate, it could benefit a variety of exchange traded funds, including the VanEck Bitcoin Strategy ETF (XBTF), the VanEck Digital Assets Mining ETF (DAM), and the VanEck Digital Transformation ETF (DAPP).
The actively managed XBTF provides exposure to bitcoin futures while DAM and DAPP are index-based ETFs that focus on crypto-correlated equities — an asset class that’s enduring its own share of 2022 struggles as digital currency prices retreat.
“So what happens next? Where Bitcoin settles at the end of the third quarter may be key for the short term, according to Rekt Capital, a popular technical research newsletter for crypto. Quarterly closes are keenly watched levels for traders,” reported Jack Denton for Barron’s.
Rekt Capital’s analysis of bitcoin’s recent technicals indicates that the digital coin could be in for more pain if it can’t hold the $19,880 area, suggesting that if that level is breached, investors don’t need to rush into ETFs such as DAM, DAPP, and XBTF.
However, if that price range acts as credible support or if it bitcoin notches new bear market lows, those ETFs could be attractive options for risk-tolerant buyers. Add to that, among all major asset classes, bitcoin is expected to be the best performer in 2023, according to some experts.
“Bitcoin has the highest projected return over the next year or so among asset classes including global stocks, government bonds, corporate debt, real estate, private equity, and hedge funds, according to analysis and projection of alternative investment performance by a team at J.P. Morgan,” according to Barron’s.
The bank is forecasting a 38% jump for bitcoin next year–– enough to get it out of a bear market. A 38% increase from current levels would take bitcoin to $27,250, meaning it would still need to more than double from there to reclaim its record high.
If seasonal trends hold up, the aforementioned VanEck ETFs could be in for a good October.
“But for a final word as investors head into the month ahead, it might be worth looking at the largest crypto’s historical performance in October, a month in which Bitcoin has, on average, risen 33%,” noted Barron’s.
For more news, information, and strategy, visit the Crypto Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.