With Bitcoin’s halving months away, it may be time to go risk-on

More tradition than coincidence, the Christmas season is around the corner again and the market is looking good for yet another run. Bitcoin (BTC) surged to more than $35,000 in October, another record high for 2023. The year-long rally has been attributed to unconventional market trends, including excitement over the Bitcoin spot ETF applications pending with the Securities and Exchange Commission.

If, like me, you’ve been in the crypto space since 2014, you’d agree that the holiday season comes with a euphoric feeling — especially this year. Everyone seems to agree that a bull run is just around the corner, so it’s time to keep a watchful eye on the market and explore unique opportunities in more than one niche — and to contemplate your approach to trading.

A conventional Christmas rally?

Christmas rallies bring excitement and joy to many in the crypto scene. Historically, the season brings an uptick in trade volumes, significant market movements, and price surges. However, recent years have defied convention, with market dynamics influenced by unprecedented factors. Take the global pandemic in 2020, for example, along with Elon Musk’s tweets in 2021 and 2022. Cryptocurrencies have soared for reasons no one could predict.

Related: Bitcoin beyond 35K for Christmas? Thank Jerome Powell if it happens

Predicting crypto market behavior is akin to forecasting the weather. It’s a challenging endeavor. While past years have brought December delights, this season is influenced by far more complex factors, including regulatory developments and geopolitical tensions.

Never mind ETFs — Bitcoin’s halving lies ahead

Investors have been positioning themselves in anticipation of a greenlight from the SEC for a Bitcoin ETF. The theory here is that an ETF will bring in institutional investors to crypto.

There is also the euphoria that Bitcoin’s upcoming halving event has brought to the market. The Bitcoin halving event — scheduled to occur in April 2024 — is significant. It’s tied to Bitcoin’s finite supply of 21 million coins. The apex cryptocurrency is issued primarily through mining. Bitcoin’s halving refers to the mechanism by which the number of new Bitcoin created in each block is reduced by 50%. It occurs every 210,000 blocks (or roughly every four years). The halving ensures Bitcoin remains a scarce and highly sought-after asset.

BITCOIN to $100k. Saying for years gold&silver GOD’S money. BITCOIN peoples $. Bad news IF stock & bond market crash gold&silver skyrocket. WORSE NEWS IF world economy crashes BC $1 million Gold $ 75K silver to $60k. SAVERS of FAKE US $ F’d. DEBT too high. Mom, Pop & kids in…

— Robert Kiyosaki (@theRealKiyosaki) August 14, 2023

The upcoming halving has led to big predictions for Bitcoin’s price. “Rich Dad, Poor Dad” author Robert Kiyosaki believes it will hit at least $100,000. Max Keiser is forecasting a new all-time high of $220,000. MicroStrategy founder Michael Saylor is — as always — extremely bullish, envisioning a price of $1 million. The predictions are based on both historical trends and social influences. These and other unconventional forces were behind the rally we witnessed in October.

In my opinion, Bitcoin could comfortably break its all-time high of $69,000, and possibly surpass $169,000.

What happens if an ETF isn’t approved?

Analysts at financial services firm JPMorgan have suggested that if the SEC rejects the ETF applications before it, it could lead to legal action by the applicants. A court already ruled in Grayscale’s favor against the SEC in August, paving the way for Grayscale to convert its Bitcoin trust into a spot ETF. BlackRock, Cathie Wood‘s ARK Invest, and other firms are also in the race to win ETF approvals.

I’m sure it will be much more boring than this — but sometimes it does feel like this is all a setup for a giant Gensler semi-comedic rug-pull.

— Dave Nadig (@DaveNadig) October 30, 2023

Multiple spot Bitcoin ETFs could be approved within months. At least for now, it seems inevitable, if not imminent.

Conflict in the Middle East

Geopolitical tensions and outright wars are a wildcard in the world of cryptocurrencies. The ongoing Middle East conflict between Israel and Hamas is a stark reminder of how external factors can ripple into the market. While the immediate implications may not be clear, historically, investors seek refuge in alternative assets —including cryptocurrencies— during global crises. So far, the war hasn’t affected the crypto market, but as the situation unfolds, the market could see shifts in sentiment and capital flow.

Three days after the breakout of the war, crypto prices fell and the price of oil surged after being affected by traders speculating that the war may disrupt supplies if it spread to neighboring nations like Iran. The world’s busiest shipping routes like the Red Sea, Persian Gulf, and the Suez Canal have their home in the Middle East. This further heightens fear of an economic peril if the situation escalates to these places.

Related: Bitcoin is evolving into a multiasset network

An expansion of the war into the Sinai Peninsula and Suez region ”increases the risks of an attack on energy and non-energy trade flowing through the Suez Canal,” the Economist Intelligence Unit’s Pat Thaker noted in a comment to CNBC, “and that accounts for almost 15% of global trade, almost 45% of crude oil, 9% of refined, and also 8% of LNG tankers transit through that route.”

There has been no significant effect on the crypto market so far, but if the conflict keeps escalating, it could result in heightened price sensitivity as we enter the Christmas season.

Altcoin season?

Traders eagerly ponder the possibility of an “altcoin” season happening as festive seasons approach. Based on historical data (where we’ve seen previous alt-seasons happen in December 2017 and January 2021), we might see this run start more seriously in December. I am banking on the next alt-season to run from December (aided by Bitcoin ETF approvals) and to last until Bitcoin’s halving in April.

It’s possible Bitcoin will stall at a relatively consistent level until an ETF is approved — which means it may not be a bad time to start looking at altcoins. I am particularly keen on niche sectors including GameFi and tokenized real-world assets (RWA). (Obligatory disclaimer: I have been wrong in the past, and I might be wrong again.) When altcoin season does begin, tokens with valuable use cases in these areas could be at the forefront of this run.

This Christmas season holds the promise of a crypto bull run, but the path remains uncertain. The ETF debacle, global tensions, and the potential for altcoins all demand watchful vigilance. We can’t always predict the future, but we can prepare for it by staying informed, managing risk, and seizing strategic opportunities. It’s not just about celebrating the holidays — it’s about embracing the future of finance in the ever-exciting crypto world.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.