Bitcoin takes a hit in 2022, making the all-time high of $69,000 hit less than a year ago seem like an eternity. However, some market watchers believe the biggest cryptocurrency can regain its lost luster in 2023.
Assuming these predictions turn out to be correct, they could benefit various exchange-traded funds, including the VanEck Bitcoin Strategy ETFs (XBTF )the VanEck Digital Asset Mining ETFs (CONTAIN )and the VanEck’s digital transformation ETFs (DAPP ).
Active management XBTF provides exposure to bitcoin futures contracts while CONTAIN and DAPP are index-based ETFs that focus on crypto-correlated equities — an asset class that’s suffering its own share of 2022’s troubles as digital currency prices pull back.
“So what happens next? Where Bitcoin Settles at the End of Q3 may be the key in the short term, according to Rekt Capital, a popular technical research bulletin for crypto. Quarterly closes are highly watched levels for traders,” reported Jack Denton for Barron’s.
Rekt Capital’s analysis of recent bitcoin technicals indicates that the digital coin may struggle more if it cannot hold the $19,880 zone, suggesting that if this level is breached, investors need not rush into ETFs such as CONTAIN, DAPPand XBTF.
However, if this price range acts as credible support or bitcoin hits new lows in the bear market, these ETFs could be attractive options for risk-tolerant buyers. Add to that, out of all the major asset classes, bitcoin is set to be the best performer in 2023, according to some experts.
“Bitcoin has the highest projected return over the next year among asset classes, including global equities, government bonds, corporate debt, real estate, private equity, and hedge funds, according to the analysis and projection of the performance of alternative investments by a team of JP Morgan according to Barron’s.
The bank predicts a 38% jump for bitcoin next year, enough to pull 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 all-time high.
If seasonal trends continue, the aforementioned VanEck ETFs could have a strong October.
“But for a final word as investors head into the month ahead, it might be worth looking at the historical performance of the biggest crypto in October, a month in which Bitcoin rose, on average, by 33 %,” Barron’s noted.
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