By David Wagner

Investing.com — A Bitcoin ETF will become a reality in America this week. Some believe it will set new records. Others predict that the investors will sell the fact after they have “bought” the rumor.

This isn’t the first instance of Bitcoin rising in anticipation for a significant event only to plummet as soon it becomes reality. It was this way with futures, and also with Coinbase’s (NASDAQ:NASDAQ) IPO in 2017.

The question is, then, for prudent investors how much Bitcoin can correct history if it repeats itself.

Bitcoin should experience a mild correction.

This is why we are able to note some very pertinent comments by the Pantera Capital fund via Dan Morehead (its CEO) in a recent report that was published this month.

He recalled in particular that bitcoin plummeted after hitting new highs during its first two major correction periods, 2013-15 and 2017-18.

He also noted that corrections after the highs of 2019-20 and 2020-2021 were less severe at -61%, and -54% respectively.

We can therefore expect losses to not exceed 50% if Bitcoin goes into a bearish market after the U.S. launch of the Bitcoin ETF. This would however bring the digital currency back to around $30,000.

To justify the shallower Bitcoin bear markets, he stated that “I have always advocated that as market becomes larger and more valuable, the magnitude price fluctuations will moderate.”

Bitcoin rallies will become smaller and less significant.

Morehead however pointed out the negative side to the coin, noting that bullish rallies for cryptocurrency will be smaller than expected. He pointed out the fact that the bullish effect of various bitcoin halves over the history of Bitcoin has resulted in smaller rallies.

The first Bitcoin halving resulted a 9212% increase in value while the second saw a 2910% gain. Last year’s halving of Bitcoin resulted to a 9212% rise in cryptocurrency, while the second resulted at 2910%.

The reward Bitcoin miners receive for halving their rewards is reduced by half every four years. This amounts to a decrease in supply and has a bullish mechanical effect on Bitcoin’s price.