Fidelity Investments executive Jurrien Timmer compares Bitcoin to “exponential gold,” emphasizing its potential to surpass gold’s value in response to certain economic conditions.
Fidelity Investments’ Director of Global Macro Jurrien Timmer offers a perspective that sees Bitcoin as an “exponential gold,” highlighting its potential to outpace the value increase of gold under specific economic scenarios.
Bitcoin is on the move again (following the pattern of previous boom-bust cycles, so far). What to make of it? Let’s revisit my thesis from late 2020: 🧵 pic.twitter.com/gNFtbOScr2
The value of Bitcoin has been rising, spotlighting its potential not merely as a form of digital money but also as a possible protective asset during economic turbulence. Advocates for Bitcoin suggest that it could serve as a financial safe place in times marked by rampant inflation, sub-zero real interest rates and surging money supply.
This perspective draws parallels with eras like the 1970s and 2000s, when gold proved to be a robust investment, implying that Bitcoin could meet or exceed gold’s historical performance in safeguarding value.
Timmer’s expertise, backed by nearly three decades at Fidelity, informs his bullish stance on Bitcoin. His forecast, made in 2021, predicted Bitcoin’s market price (BTC) could soar to $100,000 by 2023, a significant jump from its current price point of approximately $34,920.
Fidelity’s engagement with cryptocurrency extends beyond mere speculation. The firm boasts a specialized branch, Fidelity Digital Assets, which provides custody and trading services for Bitcoin and Ethereum (ETH). Earlier in the year, the platform quietly expanded to offer retail customer access, signaling a broadening interest and adoption.
Moreover, Fidelity has been proactive in seeking regulatory approval for cryptocurrency-based financial products. The company recently filed a new application for a spot Bitcoin exchange-traded fund, following its initial attempt in 2021.
This move comes as part of a larger industry trend, with asset management behemoths such as BlackRock, WisdomTree, and Invesco also in the queue, awaiting the Securities and Exchange Commission’s decision on multiple Bitcoin ETF applications.
Northern Data Group says the financing will strengthen its ability to invest in “the most sophisticated hardware available.”
Northern Data AG, a German company focused on Bitcoin (BTC) mining, has secured a €575 million debt financing provided by stablecoin issuer Tether Group.
In a press release on Nov. 2, the Frankfurt-based company called the financing a “strong endorsement” of its strategy and “potential dominance in the marketplace.” Northern Data will use the proceeds to invest in the hardware available to unlock access to “Generative AI technology in Europe,” the company said.
The financing is also expected to expand Northern Data’s portfolio of data centers through Ardent Data Centres to enhance the company’s existing operations.
“Northern Data Group is a trailblazer in this domain and has already demonstrated impressive execution of its ambitious growth strategy.”
Tether Group incoming CEO Paolo Ardoino
The financing comes a few weeks after Tether announced a collaboration with Northern Data Group to focus on initiatives around AI, peer-to-peer communications, and data storage solutions.
While Tether did not disclose any figures related to the collaboration, Forbes said Tether was taking on a 20% stake in the Bitcoin miner who was planning to rent the $10,000 chips to AI startups. Yet, Tether later said that Forbes’ report had some inaccuracies in the stake size of the investment.
In late October, Tether shared its assurance opinion for Q3 2023, reaffirming the accuracy of Tether’s reserves report. Notable findings included cash and cash equivalent reserves standing at 85.7%, mostly comprised of U.S. T-Bills, in the amount of $72.6 billion between direct and indirect exposure.
Going by the handle “@bkiepuszewski,” one X user contends that the transaction processing speed (TPS) metric analysts rely on to measure how fast a blockchain network like Ethereum or the BNB Chain processes transactions is flawed.
Laying out reasons on X, the decentralized finance (DeFi) researcher is convinced that using an alternative metric, the User Ops per second (UOPS), could paint a clearer picture of how well a blockchain is utilized at all times.
Measuring Network Utilization
Typically, blockchain utilization measures how much a given network, for instance, Bitcoin or Ethereum, is being used at a given point. This is critical because it can be used to measure adoption levels since those with higher utilization rates tend to have a broader, active base, which can make it successful over the long haul.
To gauge activity, this metric considers the number of transactions processed every second when dealing with simple transfers or the total value locked (TVL) when dealing with smart contracts deployed.
As of November 1, the average network utilization rate in Ethereum, based on Etherscan data, is around 50%, down from about 100% registered in 2021. Meanwhile, the Bitcoin Transactions Per Day as of early November stood above 433,000, a nearly 2X increase from late October.
Usually, in the case of Bitcoin, considering it is a transactional layer, whenever prices rise, more BTC-related transactions are expected as users hope to increase the emerging trend.
Whether the UOPS system will be adopted in the long term remains to be seen. However, what’s clear is that the UOPS will consider the number of user operations that the network in question can process every second, all while factoring in the level of complexity of that transaction.
Out of the UOPS, analysts will instantaneously know how well the blockchain can handle user load without the risk of congestion, as usually is the case in Ethereum when markets are trending higher.
The Rise Of Ethereum Layer-2s
At the same time, according to @bkiepuszewski, using UOPS instead of TPS brings clarity considering the widespread use of layer-2 solutions, including OP Mainnet, Base, and StarkNet, which bundles transactions offline before confirming them on the mainnet as a single transfer. The more dapps choose layer-2 solutions, the more flawed blockchain throughput calculation will be if TPS guides.
Presently, more developers are opting for layer-2 as their base to avoid scaling issues while accessing the latitude to deploy intensive dapps such as social media platforms, as seen with Friend.tech. According to L2Beat, Arbitrum and OP Mainnet have TVLs of over $6.5 and $2.9 billion, respectively.
FTX Founder Sam Bankman-Fried leaves Manhattan Federal Court after a court appearance on June 15, 2023 in New York City.
Michael M. Santiago | Getty Images
As lawyers in Sam Bankman-Fried’s criminal trial presented their closing arguments on Wednesday, prosecutors reminded jurors of the mountain of evidence provided by key witnesses, while defense counsel accused the government of portraying the FTX founder as a “monster.”
The prosecution kicked off the proceedings, trying to give the 12 jurors a clear sense of why they’ve spent the past four weeks sitting in a lower Manhattan courtroom.
“Almost a year ago, thousands of people from all over the world who deposited money with FTX started withdrawing funds,” Assistant U.S. Attorney Nicolas Roos told the court.
Roos said there’s “no serious dispute” that $10 billion in customer money that was sitting in FTX’s crypto exchange went missing, with some of it going to to pay for real estate, investments, loan repayments and political donations.
The main thing the jury has to decide, Roos said, is whether Bankman-Fried knew that taking the money was wrong.
“The defendant schemed and lied to get money, which he spent,” Roos said.
Bankman-Fried, the 31-year old son of two Stanford legal scholars and graduate of Massachusetts Institute of Technology, faces a potential life sentence if convicted on charges, which include wire fraud, securities fraud and money laundering, all tied to the collapse late last year of FTX and sister hedge fund Alameda Research. He pleaded not guilty.
The trial, which began in early October and is set to wrap up in the coming days, has largely pitted the testimony of Bankman-Fried’s former close friends and top lieutenants against the sworn statements of their former boss and, for many of them, former roommate.
The government’s key witnesses included Caroline Ellison, Bankman-Fried’s ex-girlfriend and the former head of Alameda, and FTX co-founder Gary Wang, who was Bankman-Fried’s childhood friend from math camp. Both pleaded guilty in December to multiple charges and cooperated as witnesses for the prosecution.
FTX founder Sam Bankman-Fried is questioned by prosecutor Danielle Sassoon (not seen) during his fraud trial over the collapse of the bankrupt cryptocurrency exchange at federal court in New York City, U.S., October 31, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
When it was time for Bankman-Fried’s team to mount a defense, lead counsel Mark Cohen left the bulk of the case to his client, who spent three days on the stand telling the jury that he didn’t defraud anyone, didn’t take customer money and tried to work with his deputies to keep FTX from failing.
Roos spent Wednesday morning asking the jury to look at the evidence. At one point, he asked, “Who is responsible? He then stepped out from behind the podium and towards the defense table, pointed at the defendant and said, “This man, Samuel-Bankman-Fried.”
“A pyramid of deceit was built by the defendant,” Roos said. “That ultimately collapsed.”
The facts, as listed by Roos, were that customers believed their deposits were their own and not to be used by anyone else; that FTX ads continually said the exchange was the safest and easiest way to buy cryptocurrency; and that $10 billion was missing.
Roos told the jury that Bankman-Fried lied to them, reminding them how smooth the defendant was in answering questions from his own attorney but how “he was a different person” when it was the prosecutors’ turn. He had a perfect memory on Friday, Roos said, telling the jury that Bankman-Fried knew the details about the layout of his Airbnb office in California, the reason he went to Hong Kong and why he picked the Miami Heat arena as the one for FTX to sponsor.
That all changed when the government was asking the questions.
“It was uncomfortable to hear,” Roos said, adding that Bankman-Fried said “I can’t recall” over 140 times during questioning by the government.
“To believe his story, you’d have to ignore the evidence,” Roos said. “You’d have to believe the defendant, who graduated from MIT and built two multibillion-dollar companies, was actually clueless.”
Critical to the failure of FTX was the use of customer funds to cover losses in Alameda’s books following the plunge in crypto prices last year. Roos said Bankman-Fried is the one who gave special privileges to Alameda, which he started before founding FTX, allowing it to siphon customer money. He knew it was wrong, Roos said, which is why he kept it secretive.
Roos said Bankman-Fried had been lying to the public about Alameda’s “secret advantages,” and was being untruthful when he told the public and the media that Alameda was just like everyone else.
“Those were lies,” Roos said. Had they known the truth, “investors would have run for the exits,” he said.
Bankman-Fried blamed “messy accounting,” Roos said, adding “give me a break.” He said those comments contradicted what he told Congress, that he’d reconciled the books.
Judge Lewis Kaplan, who presided over the trial, started court almost a half hour late on Wednesday because a juror was stuck in traffic. Then there were technical issues, as the second row of monitors in the jury box stopped working. That led to a 1- minute break.
Later in Roos’s closing, he brought up the infamous spreadsheet of the seven alternate versions of Alameda’s finances that Ellison had put together when third-party lenders were asking for an update. Bankman-Fried testified that he’d seen a spreadsheet but didn’t remember the details and didn’t ask Ellison questions about it. Roos called the explanation “implausible.”
FTX founder Sam Bankman-Fried is questioned by defense lawyer Mark Cohen as he testifies in his fraud trial over the collapse of the bankrupt cryptocurrency exchange, at federal court in New York City, U.S., October 30, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
Roos referred to metadata showing that Bankman-Fried was part of a meeting for about 30 minutes where the hole in FTX’s balance sheet and repaying lenders were discussed. Metadata shows he was studying the Google Doc of the company’s finances, with numbers indicating the billions in borrowing from FTX.
Roos brought up testimony from three firsthand witnesses who said that they’d spoken with Bankman-Fried about the giant hole in the balance sheet. Ellison said there was no way to repay it, and Singh testified that Bankman-Fried admitted to him that “we are a little short on deliverables.”
Bankman-Fried “had the arrogance to think he could get away with it,” Roos said.
Another point speaking to the defendant’s intent, Roos said, was his tweeting.
Bankman-Fried’s plan last November, when he knew there was only enough money to process one-third of client assets, was to send a confident tweet thread. Singh testified that he wasn’t comfortable with the plan, yet Bankman-Fried went on to tweet that “assets are fine” as the bank run was underway, Roos said.
Bankman-Fried knew Alameda had a negative net asset value of $2.7 billion, Roos said, but wanted to make another $3 billion in venture investments. The only way to do that was with FTX customer funds, he said.
Additionally, Roos told the jury, client money went to $100 million in real estate expenses, including a $30 million penthouse in the Bahamas and $16 million for his parents’ home.
In referencing the Super Bowl picture with Katy Perry and others, Roos called Bankman-Fried a “celebrity chaser.”
Roos walked the jury through a timeline of key moments, as follows:
On Sept. 1, Bankman-Fried saw that FTX had a $13.7 billion hole.
On Sept. 7, Bankman-Fried wrote a long memo proposing the shutdown of Alameda. Still, he spent $45 million for a stake in Skybridge Capital.
Then, on Sept. 22, he paid $4 million to himself.
Four days later, he sent $250 million to Modulo Capital, a hedge fund in the Bahamas.
And on Oct. 3, he funneled $6 million for political donations.
“That’s all you need to know to find him guilty,” Roos said.
In closing the prosecution’s case, Roos referenced the seven charges facing Bankman-Fried and why he can be convicted of each.
In highlighting counts three and four, which charge the defendant with wire fraud against Alameda’s lenders, Roos emphasized the importance of Bankman-Fried’s knowledge of the alternative balance sheet. For count five, conspiracy to commit securities fraud on FTX investors, the primary evidence came from investors who expressed concern about a conflict of interest between Alameda and FTX and who said they wouldn’t have put in money if they knew the truth. Bankman-Fried also lied about revenue, Roos said.
The prosecution reminded the court that Bankman-Fried directed losses to be shifted to Alameda and that FTX’s insurance fund had made up numbers. Add it all up, Roos said, and it debunks the defense’s main argument that Bankman-Fried acted in good faith and believed everything would work out.
“This was a fraud that occurred on a massive scale,” he said.
Following the government’s closing argument, Cohen began his statements at a little before 3 p.m. He said the government is portraying Bankman-Fried as a “monster” and depicting him as a “villain” and a “bad guy.” Lawyers brought out testimony about his sex life and showed photos of him “looking awkward with celebrities,” Cohen said.
He said Bankman-Fried would talk to just about anyone who would listen, behavior that could make life messy but isn’t criminal. He said the prosecution has made the case into a “movie,” and the defense is showing what it’s like in the real world, where things are messy.
“Every movie needs a villain,” Cohen said.
He claimed the case against his client was built on the false premise that FTX was a fraudulent enterprise to intentionally steal customer funds.
Cohen broke the case up into two time periods. The first was 2019 to 2021, when there’s no indication of criminal intent. Up until June 2022, everyone involved thought they were operating the most successful crypto exchange in the world, Cohen said.
The second period was from June to November of 2022. Crypto winter had led to the failure of a number of businesses in the industry. That’s the first time it became clear that Alameda was using customer funds. In the fall of that year, Bankman-Fried saw a liquidity problem, not a solvency problem, Cohen said. He always thought there were sufficient funds on and off the exchange.
While FTX’s lack of a risk management system or chief risk officer reflected poor system controls, bad business decisions aren’t crimes, Cohen said.
The government carries the heavy burden of proving Bankman-Fried operated with criminal intent, and “it has not,” Cohen said. He said that prosecutors called Bankman-Fried “evil” and “arrogant” and described him as a “criminal mastermind.” But in getting into specific actions, “there’s nothing wrongful about margin trading,” he said.
Cohen said his client provided the court with good faith answers about what he remembered, and asked why a criminal mastermind would go speak in front of Congress. He described the government’s assumptions as “heads I win, tales you lose.”
Cohen told the jury that if any members of Bankman-Fried’s inner circle truly thought something nefarious was happening, they had options, including resigning, leaving the Bahamas or “blowing the whistle.” None of them did, he said.
During much of Cohen’s closing, Bankman-Fried had his head awkwardly turned to the right toward the jury box. Near the end, he was looking down, fighting back tears.
Court adjourned late Wednesday after Cohen finished with his closing argument. The government will get its shot at rebuttal Thursday morning, and then the jury will get its instructions ahead of deliberations.
Judge Kaplan said he wasn’t rushing jurors, but he said he was willing to stay late Thursday and that the government would cover dinner and likely give jurors a free ride home.
Data from previous crypto market cycles suggests that Bitcoin (BTC)’s dominance over altcoins will likely keep rising over the next several months, according to Glassnode.
In a newly published report, the blockchain and market intelligence outlined how the leading crypto asset’s dominance is shaping up against the second largest crypto, Ethereum (ETH), compared to previous years.
Ethereum Beating Gold, But Losing to BTC
When weighed against gold, Bitcoin has appreciated by 93% this year, with the former’s price per ounce staying relatively contained under $2000. ETH, by contrast, has only appreciated by 39%.
According to Glassnode, while both assets have experienced “similar magnitude downswings” throughout the year, upswing periods have seen more substantial gains for BTC. Glassnode writes:
“Prior cycles have seen ETH drawdown to depths of over -50% on a relative basis during the bear market recovery phase, with the current drawdown reaching -38%.”
Glassnode said that ETH’s drawdown phase versus BTC since the former’s “cycle low” in June 2022 has already continued for 470 days so far, compared to periods of less than 400 days in prior cycles.
As of November, Bitcoin dominance has risen from 38% in late 2022 to 53%, while Ethereum dominance stands at merely 17%. Market dominance refers to how much of the total crypto market cap Bitcoin and Ethereum respectively comprise.
In recent weeks, the ETH/BTC price ratio has fallen to a roughly 15-month low of 0.052. The excitement around a potential Bitcoin ETF, alongside a “flight to quality” away from bonds into other assets, has helped push BTC away from its other crypto competitors.
As a group, altcoins excluding stablecoins have grown 37% this year, meaningfully trailing BTC. Stablecoins, which are typically backed by non-crypto assets like fiat currencies, comprise over 9% of crypto’s total market cap.
When Does Bitcoin Season End?
According to Glassnode’s lead analyst James Check, the market is still “well and truly in a period of Bitcoin dominance expansion.”
“It took up until March 2020 when this started to reverse,” said Check regarding the previous cycle in a recent video analysis.
In March 2020, Bitcoin collapsed from $9000 to under $4000 on “Black Thursday,” before later recovering and rallying to over $64,000 over the next 12 months. This rally period, however, was accompanied by even greater gains for ETH and other altcoins, such as Dogecoin (DOGE).
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(Bloomberg) — MicroStrategy Inc., the enterprise-software maker that is the largest publicly-traded holder of Bitcoin, posted a third-quarter loss after taking a writedown because of a decline in the value of the cryptocurrency.
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The Tysons Corner, Virginia-based company’s net loss widened to $143.4 million, or $10.09 a share, from $27 million, or $2.39, in the year-ago period. Revenue from the software business rose about 3% to $129.5 million, above the average forecast of $125.8 million of analysts surveyed by Bloomberg.
MicroStrategy, which has been buying Bitcoin in bulk since 2020 as a hedge against inflation, has been forced to take massive writedowns over the years following downturns in the volatile digital currency. Bitcoin has increased about 30% since falling 11% in the three months ended Sept. 30.
Co-founder Michael Saylor has turned the once struggling software company into a Bitcoin proxy for equity investors by accumulating more than $5.5 billion of the cryptocurrency. Saylor gave up his chief executive officer title last year, saying he would focus on the Bitcoin aspect of the company’s dual strategy.
The $33.6 million impairment loss for the quarter brings the cumulative total to over $2.2 billion, meaning the company has written off almost half the Bitcoin purchases it has made, according to Bloomberg calculations. MicroStrategy as of Oct. 31 held more than 158,000 Bitcoin at a total cost of $4.69 billion, or $29,586 each, according to a statement.
In a post-earnings conference call, Chief Financial Officer Andrew Kang said the company plans to purchase more Bitcoin.
Investors and analysts are beginning to debate whether MicroStrategy’s shares will continue to command a Bitcoin-related premium, given that the US Securities and Exchange Commission seems likely to approve ETFs that invest directly in Bitcoin after a key court loss earlier this year.
Since the middle of 2020, MicroStrategy shares have more than tripled as Bitcoin surged in value. The benchmark Standard & Poor’s 500 Index gained about 40% during the same period.
ETF Competition
Saylor in the conference call pointed to advantages of investing in MicroStrategy stock instead of a US spot Bitcoin ETF.
“There will be fees to invest in a spot ETF,” Saylor said. “The ability to get Bitcoin exposure and not get charged a fee is another plus for us.”
Saylor said spot ETFs would “grow the market dramatically” and be “an onramp for capital on Wall Street to come into the Bitcoin ecosystem.”
Since the quarter ended, MicroStrategy’s Bitcoin holdings have risen in value by around $1.2 billion, which was about the company’s market capitalization when it started buying crypto in 2020.
Saylor said he will sell some of his MicroStrategy shares between January and April of next year in connection with expiring options.
–With assistance from Tom Contiliano.
(Updates with comments from executives from the sixth paragraph.)
The price of the first cryptocurrency could rise to $150,000 by January 2025 due to the approval of spot Bitcoin (BTC) ETFs in the United States.
As reported by CNBC, citing a Bernstein forecast, the bullish estimate for digital gold quotes is almost five times higher than the current rates above $34,000, where the asset has consolidated after testing the $35,000 mark. The forecast is also more than double the all-time high of $69,000 achieved by the BTC in November 2021.
Bernstein senior analyst Gautam Chhugani believes the SEC will approve the first Bitcoin ETFs in early 2024. This product will allow ordinary investors to access cryptocurrency directly from their investment portfolios.
According to the expert, as a result, Bitcoin funds will accumulate up to 10% of the total supply of digital gold. So far, the only such instrument on the market is Bitcoin Trust (GBTC) from Grayscale, which accounts for about 3% of the issue.
“A good idea is only as good as its timing – SEC approved ETFs by world’s top asset managers (BlackRock, Fidelity, et al), seems imminent.”
Gautam Chhugani, Bernstein senior analyst
The expert made his forecast in a report in which he analyzed the activities of several mining companies in light of the approaching Bitcoin halving. According to Chhugani, the halving of the block reward, expected in April, will “wash out” weak players from the industry. However, this will open the way for “survivors to greater profits,” he emphasized.
Previously Crypto services provider Matrixport insisted Bitcoin is still on track to reach $45,000 by the end of the year. Experts believe BTC futures funding rates stay “sky-high,” signaling a “FOMO-driven market.”
The largest crypto exchange in the U.S. announced on Thursday that smaller investors, otherwise known as retail traders, are now be able to trade Bitcoin and Ethereum futures on its U.S. platform.
Customers can access the two new financial products through Coinbase Advanced, an offshoot of the exchange’s main platform that lets investors trade more financially complex crypto products. As opposed to CME, a U.S. derivatives exchange that also sells Bitcoin and Ethereum futures, Coinbase’s offering targets shallower-pocketed traders.
“These contracts offer lower upfront capital requirements and can be an affordable investment option for a broader range of retail customers,” the company wrote in a blog post announcing the products.
Coinbase’s unveiling of a futures contract in the U.S. for both Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization, comes as the exchange looks to diversify its products to compete with the likes of Binance, the largest cryptocurrency exchange in the world.
Futures allow traders to not only speculate on the future price of an asset but to gamble with more assets than they actually own. Customers can front, for example, $100 as collateral and trade $200 worth of crypto, magnifying their losses and gains as a cryptocurrency’s price waxes and wanes.
By most estimates, the global trading volume of the crypto derivatives markets, which include futures, far outpaces that of crypto spot markets, or the simple purchase or sale of cryptocurrencies. As of Wednesday, the 24-hour trading volume of crypto derivatives was approximately $37 million on Binance compared with just about $9 million in spot, according toCoinMarketCap.
Binance dominates the crypto derivatives market. The 24-hour trading volume of its nearest competitors OKX and BitMart was a little more than a fourth of Binance’s. If its recent product announcements are any indication, Coinbase, which has historically been more willing than Binance to play nice with regulators and avoid risky crypto financial instruments, is looking for a slice of that pie.
In April, the publicly traded crypto exchange announced that it had obtained a regulatory license in Bermuda. In May, it then launched a Bermuda-based offshore exchange, which specializes in futures. And then, in late September, it opened up its offshore exchange to retail investors.
The exchange’s most recent unveiling of crypto futures, however, is in the U.S., where it obtained a license to sell the risky financial instruments earlier this year.
In a recent development, another proposed Spot Bitcoin ETF has been listed on the Depository Trust and Clearing Corporation’s (DTCC) website, becoming the second proposed Spot Bitcoin ETF to appear on the corporation’s website.
BTCO Joins IBTC On DTCC Website
The Invesco Galaxy Bitcoin ETF under the ticker ‘BTCO’ recently appeared on the DTCC website, joining BlackRock’s spot Bitcoin ETF, which goes under the ticker ‘IBTC’ as uncertainty around a possible approval of these funds continues to heighten.
Source: DTCC website
Many had speculated an approval was imminent when BlackRock’s IBTC was earlier listed. However, the optimism has sort of cooled off following a recent revelation by a spokesperson for the financial services company. The representative clarified that the listing of these ETFs was simply “Standard Practice” and that it doesn’t indicate any potential approval by the SEC.
An ETF expert had also weighed in and stated that DTCC’s listing didn’t mean anything in the grand scheme of things regarding a possible approval of Bitcoin ETFs by the United States Securities and Exchange Commission (SEC). Going by this, the DTCC listing only suggests that these asset managers are preparing just in case they get approved by the SEC.
Such preparations also include asset managers BlackRock and VanEck recently revealing their plans to begin seeding for their respective funds. While such a move doesn’t guarantee that the SEC is likely to approve these funds anytime soon, it, however, shows the optimism of these firms that their Spot Bitcoin ETF will launch sooner or later.
Valkyrie Joins The Spot Bitcoin ETF Amendment Train
In a post shared on his X (formerly Twitter) platform, Bloomberg analyst James Seyffart noted that the asset management firm Valkyrie had joined the “prospectus amendment train” with the latest filing of their revised Spot Bitcoin ETF prospectus. Valkyrie joins the likes of ARK Invest, BlackRock, Fidelity, and Bitwise, who have also filed amendments to their prospectus.
Seyffart happens to be one of those who believe that these amendments could mean something. ARK Invest was the first asset manager to amend its prospectus, which led Seyffart and fellow Bloomberg analyst Eric Balchunas to predict that the US Securities and Exchange Commission (SEC) could approve a fund as early as next year.
Meanwhile, it is worth mentioning that the SEC has so far not said anything regarding Grayscale’s application despite the Commission opting not to file an appeal. But that could change soon as ETF enthusiast and prominent financial lawyer Scott Johnsson said that the Commission is set to have a closed meeting on November 2; its first since the Grayscale deadline expired, and one of the agenda for the meeting includes resolving litigation claims.
Adam Back, the co-founder and CEO of Blockstream, has recently drawn attention to a notable correlation, which is that the prices of ASIC (Application-Specific Integrated Circuit) miners tend to align with Bitcoin prices.
This parallel trend has been confirmed historically, with the miners peaking in price during the 2021 Bitcoin bull run, just as BTC reached its peak of $69,000.
Back’s analysis shows that even as the market navigates through changing tides, the fate of mining equipment is an important piece of the puzzle for understanding the overall ecosystem.
The CEO of Blockstream also suggests that the price of ASIC miners is not just a reflection of manufacturing costs or technological advancements but also an indicator of market sentiment toward Bitcoin itself.
The Miners’ Market: A Reflection Of Bitcoin’s Value
According to Back in a video posted on X (formerly known as Twitter), during the prelude to the 2021 bull market, the price of ASIC miners was low, mirroring the anticipation and optimism of the Bitcoin community for a significant rally.
However, as Bitcoin’s value skyrocketed, so did the price for these mining machines, hitting a peak of $120/Terrahash (TH) alongside Bitcoin’s all-time high. Yet, with the subsequent decline in BTC value, the demand and price for ASIC miners plummeted, currently trading hands at under $15/TH—a stark contrast to their previous highs.
Despite a positive momentum for Bitcoin this year, ASIC miner prices have remained subdued. However, Back maintains an optimistic outlook for a potential resurgence in ASIC miner prices.
Historically there’s been a high correlation between ASIC miner and #Bitcoin prices. Learn how the new the Blockstream ASIC (BASIC) Note investment opportunity capitalizes on this thesis. Blockstream CEO Dr. @adam3us explains: pic.twitter.com/zHAqhLsGet
The CEO of Blockstream suggests that as Bitcoin enters deeper into a bull phase, the value of these essential mining components is likely to increase.
Back points to the upcoming Bitcoin Halving — an event that historically impacts Bitcoin’s price due to the reduced rate at which new Bitcoins are generated — as a possible catalyst for Bitcoin’s price surge and a parallel rise in ASIC miner values.
Bitcoin Path To Reclaim $35,000
Despite several predictions and analyses about Bitcoin, the top crypto has continued to move at its own pace. After retracing from the previously tapped $35,000, the asset has begun to thrive to reclaim that price zone.
Bitcoin (BTC) price is moving sideways on the 4-hour chart. Source: BTC/USDT on TradingView.com
Currently, the asset trades at $34,269, down by 1.1% in the past 24 hours. However, looking at its weekly performance, Bitcoin still appears to be in gains. Though it has dropped by 0.7% in the past 7 days, it is still up by 20% in the past two weeks.
Back mentioned that the Bitcoin Halving appears as a significant milestone that could precede a notable increase in Bitcoin’s price, typically starting around six months post-halving.
While the CEO of Blockstream hesitates to make a definitive prediction about the exact outcome this time, he remains optimistic about Bitcoin’s prospects, positing that the cryptocurrency could still grow further this year or next year.
Featured image from Unsplash, Chart from TradingView
Michael van de Poppe, a prominent figure in the world of crypto analysis and trading, recently shared some striking viewpoints with the crypto community.
On the popular social media platform X, the esteemed analyst made a bold declaration, emphasizing the early stages of what he believes to be a colossal bull cycle, one that will undoubtedly leave a profound, global impact.
In his recent post on X, van de Poppe noted a gradual shift in market sentiment, a shift that he perceives as the world’s slow but steady recognition of the undeniable significance of cryptocurrency.
Slowly, but surely, the sentiment starts to change.
Slowly, but surely, the entire world starts to realize that #Crypto is the next big thing.
We’re at the early stages of a massive bull cycle, which is also going to have a fundamental, global impact.
“We’re at the early stages of a massive bull cycle, which is also going to have a fundamental, global impact,” van de Poppe emphasized, encouraging enthusiasts to prepare themselves for the imminent changes that lie ahead.
Amidst these observations, the current price of Bitcoin (BTC) according to CoinGecko stands at $34,318, with a slight 24-hour dip of 0.2% but still retaining a seven-day gain of 0.1%.
Bitcoin’s October Trend: A Shift From ‘Buy And Hold’
Interestingly, as October draws to a close, the cryptocurrency community is turning its attention to a historical trend that supports the notion of outperforming the traditional “Buy and Hold” model for Bitcoin.
This trend, recognized by the well-regarded analyst PlanB also in a recent X thread, suggests the emergence of favorable windows of opportunity approximately six months before halving events, with these windows closing around a year and a half after the said events.
Reminder: October closing price tomorrow is the start of the [halving minus 6 months – halving plus 18 months]-period that historically outperforms buy&hold. And that is the essence of the S2F model: that scarcity and thus halvings drive price.https://t.co/WiwIjN07phpic.twitter.com/dM4wJVfAmZ
PlanB’s analysis sheds light on the cyclical nature of Bitcoin’s performance, pinpointing strategic moments within the market cycle that have historically proven advantageous for investors adopting a proactive approach.
Total crypto market cap at $1.246 trillion on the daily chart: TradingView.com
Crypto Landscape: Navigating The Ever-Changing Market
With the Bitcoin market constantly evolving, PlanB’s insights serve as a guiding compass for those navigating the complexities of the cryptocurrency landscape, highlighting the potential benefits of timing one’s investments strategically.
As the cryptocurrency community eagerly absorbs these insights and analyses, the market remains poised for further developments and transformations. With the ongoing surge in interest and recognition of the potential of digital currencies, the landscape is set to undergo substantial shifts, potentially paving the way for a new era in the global financial domain.
Data shows the Bitcoin futures open interest has risen recently and has reached a territory that has led to volatility for the asset in the past.
Bitcoin Futures Market May Be Becoming Overheated
As explained by an analyst in a CryptoQuant Quicktake post, the BTC open interest has entered the overheat zone following the latest rally in the cryptocurrency’s price.
The “open interest” here refers to the total amount of Bitcoin futures contracts open on all derivative exchanges in the sector. The metric naturally accounts for both short and long positions.
When the value of this indicator rises, it means that the investors are opening up more positions on the futures market right now. Generally, whenever this happens, the overall leverage in the market also goes up, and with leverage, chaos can follow.
Thus, whenever the open interest is at a high enough value, the cryptocurrency price may become more likely to show a high amount of volatility/fluctuations.
On the other hand, decreasing values of the metric imply a closure of positions in the sector (whether by the users’ own volition or through liquidation), which can naturally result in lesser leverage. As such, the asset may become calm when the indicator is at low values.
Now, here is a chart that shows the trend in the Bitcoin open interest over the past year:
The value of the metric seems to have been going up in recent days | Source: CryptoQuant
As displayed in the above graph, the Bitcoin open interest has been heading up in the last few weeks, suggesting that investors have been opening more positions on the futures market.
In the chart, the quant has highlighted in yellow a territory where the open interest may be considered overheated. The indicator was in this zone in the lead-up to the FTX crash in November 2022, and it was also there between June and August.
In the first case, the market initially saw a short squeeze (that is, a mass amount of short liquidations) as the price saw some uplift, and then later, a long squeeze took place as the asset crashed, cooling down the open interest.
Bitcoin only saw a long squeeze in the second instance, as the cryptocurrency crashed in August. The indicator retraced to relatively low levels with this liquidation event.
From the graph, it’s apparent that the Bitcoin open interest has once again reached this yellow zone that proved to be a predictor for volatility in these last two occurrences.
In theory, the volatility due to the overheated futures market could take the asset in either direction. Still, given that only long squeezes could cool the market down the last two times the open interest ventured into this zone, BTC may once again see a similar outcome.
“Although I don’t expect anything to happen immediately, we need to keep an eye on it from now on,” notes the analyst. “Indeed, we should be cautious and not over-bet on our investments now that we have entered the overheating zone.”
BTC Price
Bitcoin has continued to move in an overall sideways trajectory during the past few weeks as the asset is still floating around the $34,400 level.
Oct. 31 marks the 15th anniversary of the white paper from Satoshi Nakamoto, the pseudonymous person or persons that introduced the world to Bitcoin.
Today, the token sits at $34,494 according to data from CoinGecko, the world’s largest data aggregator.
Bitcoin through the years
Following the release of the white paper, Bitcoin as a cryptocurrency was launched in 2009, with the first genesis block being mined on Jan. 9. Four years later, the world’s first cryptocurrency was sitting at $204.
In the next four years, the cryptocurrency reported growth until 2017, where it was reported at $6,369 on Oct. 31 in that year.
Bitcoin then continued to report consistent growth until 2021, when it grew to $61,837. It was in this year a couple of notable things happened, including El Salvador becoming the first country to adopt the digital asset as a legal tender, before it entered a crypto winter. On Oct. 31, 2022, Bitcoin was reported to be sitting at $20,624.
A price surge attributed to lack of liquidity
In October of this year, Bitcoin once again saw growth in what many analysts suggest as being an end to the crypto winter.
Although several reasons were attributed to this new uptick, analysts in an Oct. 30 report highlight that the surge could be driven by an ongoing liquidity shortage and declining stablecoin market cap.
While Binance remains the largest venue in the world for Bitcoin futures trading, another more regulated market is now following closely behind.
CME Bitcoin Futures now stands as the second-largest Bitcoin futures exchange in the world by open interest, signaling rising intrigue from institutions seeking Bitcoin exposure.
The Return of the CME to Bitcoin
According to data from Coinglass, there are now over 103,000 BTC in futures open interest (OI) live on the CME, worth $3.54 billion. That’s over 20% of the total Bitcoin futures OI tracked by the site, valued at $15.59 billion.
Binance, the single larger competitor to the CME, bears a similar 112.63K BTC ($3.87 billion) in futures OI, while Bybit hosts the third largest market with 74.31K BTC ($2.55 billion) in futures OI.
Open interest tells us how many Bitcoin futures contracts are outstanding in the market that have not been settled. Futures contracts are cash-settled agreements to buy or sell BTC from another party at a certain price, on a certain date, They act like bets on the future price of Bitcoin but don’t necessarily involve trading in real BTC.
Futures trading is often done with perpetual futures contracts, which don’t settle until a trader voluntarily closes the position, or is liquidated as the trader’s balance goes negative due to regular payouts on an incorrect position.
Weeks ago, the CME was the fourth-largest exchange for futures OI, but ascended the ranks as Bitcoin’s price surged to $35,000 in October.
The event caused a broad short liquidation washout at other exchanges (ex. Binance) that cleared the perpetual futures OI market of 35,000 BTC on October 23. The CME’s perp futures, however, actually gained during the event by 4,380 BTC.
According to data from K33 Research, The CME also dominates in terms of standard expiry futures contracts, boasting an 80% market share.
The CME includes standard-sized contracts worth 5 BTC, as well as micro contracts worth 0.1 BTC.
TradFi is Back
Many analysts view the CME’s resurgence in Bitcoin futures as an indicator for institutional interest coming back to BTC.
On October 25, Reflexivity Research co-founder Will Clemente said “Tradfi is back trading Bitcoin,” in response to the uptick. Days later, Bloomberg ETF analyst Eric Balcunas noted that BITO – the largest Bitcoin futures ETF in the United States – absorbed $1.7 billion last week, while the Grayscale Bitcoin Trust (GBTC) absorbed another $800 million.
“That’s $2.5b (top 1% among ETFs) into two less desirable methods (vs spot) for exposure = while we think spot ETFs unlikely to set records on DAY ONE, clearly there’s an audience,” wrote the analyst.
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The Bitcoin MVRV ratio, an on-chain indicator, could suggest the asset may not have hit its top for the current rally just yet.
Bitcoin MVRV Ratio Says Market Isn’t Overheated Right Now
According to data from the market intelligence platform IntoTheBlock, past bull markets hit their peaks when the MVRV ratio crossed the 300% mark. The “Market Value to Realized Value (MVRV) ratio” refers to an indicator that keeps track of the ratio between the Bitcoin market cap and realized cap.
The “realized cap” here is a capitalization model for BTC that calculates the total value of the cryptocurrency by assuming that each coin in circulation is worth the same as the price at which it was last moved, rather than the current spot price.
As the price at which a coin was last moved on the blockchain was likely the price at which it changed hands, the realized cap can be interpreted as the total amount of capital that the investors as a whole have put into the asset.
The MVRV ratio compares the price of the coin (the market cap) with the realized cap, so it can tell us whether the investors are holding more or less than they put in.
Now, here is a chart that shows the trend in the Bitcoin MVRV ratio over the last few years:
Looks like the value of the metric has been going up in recent days | Source: IntoTheBlock on X
In the above graph, the Bitcoin MVRV ratio is shown as a percentage. At the 100% mark, the two capitalization models approach a equal value, suggesting that the market as a whole is just breaking-even.
Above this threshold, the investors are holding a net amount of profit, while below they are carrying loss. From the chart, it’s visible that the BTC MVRV ratio has remained above the break-even in recent months as the asset’s price has observed a rally.
At present, the metric is floating about the 150% level, suggesting that the market cap is 50% more than the realized cap. Historically, the larger the investors’ profits have gotten, the more likely they have become to take part in a selloff.
Because of this reason, tops have generally formed when the MVRV ratio has hit high levels. IntoTheBlock notes, however, that the bull markets in the past have usually only hit their peaks when the indicator has crossed the 300% mark.
Clearly, the indicator is still a significant distance away from this mark at the moment. This could be a potential sign that the Bitcoin rally hasn’t reached a state of overheat yet and thus, there might be more to come for the cryptocurrency’s price in terms of bullish momentum.
BTC Price
The Bitcoin rally has hit the pause button in the past week as the asset’s price has taken to sideways movement. Currently, the coin is trading around the $34,500 mark.
The value of BTC appears to have gone stale in the last few days | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com, IntoTheBlock.com
The Bitcoin mining difficulty has registered another positive adjustment today, which has led to the metric setting a new all-time high (ATH).
Bitcoin Mining Difficulty Has Seen Four Consecutive Positive Changes Now
The “mining difficulty” is a feature on the Bitcoin blockchain that controls how hard the miners would find it to hash blocks on the network right now. The metric is measured in terms of how many hashes the miners would need to generate before they can solve the block.
The reason this feature exists at all is that the network intends to keep its block production rate (that is, the rate at which miners go through new blocks) at a constant value.
When the miners increase their computing power (what’s called the “hashrate“), they become faster at solving blocks. To slow them back down to the standard rate, the blockchain simply increases its difficulty in the next scheduled adjustment.
The mining difficulty works in a completely automatic way, with the code that Satoshi wrote to guide the entire process. The feature serves as a measure for controlling the inflation of the cryptocurrency, as miners can’t just increase the hashrate to mint a higher number of tokens.
Now, here is a chart that shows the trend in the Bitcoin mining difficulty over the last three months:
The value of the metric seems to have been going up in recent days | Source: CoinWarz
As displayed in the above graph, the Bitcoin mining difficulty has observed some uplift in the network adjustment that happened during the last 24 hours. Following this surge of about 2%, the metric has hit a new ATH of 62.46 trillion.
Interestingly, this is the fourth straight positive difficulty adjustment that the blockchain has observed, which certainly isn’t something that happens all too often.
The reason that the difficulty has been setting one ATH after the other recently is naturally because of the fact that the Bitcoin mining hashrate has been seeing some significant growth.
The below chart shows the trend in the 7-day average BTC mining hashrate over the past year:
Looks like BTC has been rising during the last few weeks | Source: Blockchain.com
From the graph, it’s visible that the 7-day average Bitcoin mining hashrate has been climbing and setting ATHs of its own recently. The fact that the network has been forced to up the difficulty four times in a row now just showcases how relentless the miners have been at expanding their facilities.
The collective revenue of the miners mainly depends on the price of the asset, as the block rewards are given out at a near-constant rate as mentioned before. Curiously, despite this fact, a lot of the latest growth in the hashrate came while the price had been struggling.
Thus, it’s possible that the miner expansion would only ramp up from here since the cryptocurrency has now climbed to considerably higher levels with its latest rally, and with that, the miners should be enjoying much higher revenues.
BTC Price
Bitcoin hasn’t moved much since the sharp rally from a few days ago, as its price is still floating about the $34,600 level.
Crypto analyst Jason Pizzino said in a recent YouTube video that Bitcoin (BTC) has broken above a key monthly resistance level for the first time since the 2018 bear market.
Pizzino said Bitcoin closed above the monthly swing high from November 2018, marking the first time it has broken this resistance since the collapse after the 2017 bull market peak.
The monthly swing tops are very, very important to this cycle. […] This essentially tells you the trend direction.
Jason Pizzino
Pizzino believes this breakout signals Bitcoin has likely bottomed from the latest bear market and is entering a new bullish phase. He pointed to the Wyckoff accumulation schematic, saying Bitcoin’s price action matches the typical phases coming off a low.
We can now almost confidently say that for the majority of people that this was a market cycle bottom in November.
Jason Pizzino
The analyst expects Bitcoin to trade in a range between $32,000 and $48,000 over the next eight-to-11 months. This is based on the 50 percent retracement levels from the 2018 and 2022 swing highs and lows.
Pizzino said previous bull markets also traded in a range near the 50 percent level for about two years before eventually breaking out and going parabolic.
Mark these on your charts. Keep a look out for how the market reacts to these levels.
Jason Pizzino
Pizzino concluded the video by stating he believes Bitcoin could break above $50,000 by late 2024, around 12 months before the end of the current bull market cycle.
In a week brimming with anticipation, the Bitcoin and crypto market is poised to witness a series of significant events that could steer the trajectory of digital assets. From pivotal price action in Bitcoin to crucial decisions by the US Federal Reserve (Fed), and from landmark trials to influential crypto conferences, the week is packed with developments that could have substantial implications for investors and the crypto industry alike.
So here’s a detailed look at the top four events that are expected to capture the market’s attention in the coming days.
#1 Bitcoin At $40,000 This Week?
Bitcoin’s recent performance has been nothing short of impressive. The leading cryptocurrency marked its highest weekly close since May 2022, with a 15% gain last week. The bullish sentiment is further fueled by the anticipation of a spot Bitcoin ETF. Currently, Bitcoin is in a consolidation phase, but renowned technical analyst, “Titan Of Crypto,” believes there’s more to come.
Bitcoin at $40,000 next week? BTC is trying to break out from both bullish pennant and the inside bar’s range. Tenkan starts pointing up. If the following conditions are matched: Kijun follows Tenkan, daily candle manages to close above the range and stay above $34.5k. [Then,] Bitcoin could teleport to $40k in a blink of an eye.
Bitcoin price prediction | Source: X @Washigorira
#2 Fed Rate Decision And FOMC
The Federal Open Market Committee (FOMC) is set to make its rate decision on Wednesday, November 1, 2023, at 2:00 pm, followed by a press conference with Fed chair Jerome Powell at 2:30 pm. The consensus among analysts is that the FOMC will maintain the target range for the federal funds rate at 5.25 to 5.5. The CME FEDWatch tool supports this, with 96.2% expecting no change.
CME FedWatch | Source: CME
Notably, market conditions have become far more fragile than they were a year ago. The Fed needs to navigate their battle against inflation carefully as it can’t afford a severe recession.
Bank of America commented on the upcoming meeting, stating, “We still do not expect a hike in November, as the Fed is clearly worried about the extent of financial tightening. But today’s robust spending and inflation data keep a December hike on the table.”
Goldman Sachs economists added, “Fed officials appear to have signaled that they will not be hiking at their November meeting next week… the story of the year so far has been that economic reacceleration has not prevented further labor market rebalancing and progress in the inflation fight.”
#3 Sam Bankman-Fried’s Trial Nears End
The high-profile trial of Sam Bankman-Fried, related to the collapse of the FTX exchange, is nearing its conclusion. As the trial resumes on Monday, October 30, 2023, Bankman-Fried will continue his direct examination by his defense lawyer, presenting an alternative narrative to the testimonies of former employees and witnesses against him.
Following this, the government will cross-examine him, potentially leading to a rebuttal case by the prosecution. This part of the trial is expected to consume most of the week, with the jury likely to make a decision by next week’s end.
#4 Solana Breakpoint Conference
Solana’s annual Breakpoint conference is set to kick off today in Amsterdam, the Netherlands. The event, which runs from October 30 to November 3, will feature Solana Labs CEO Anatoly Yakovenko, key project leaders from the Solana ecosystem, and speakers from Stripe and Visa.
Historically, Breakpoint has been a platform for significant announcements. Last year, Solana Labs unveiled a $100 million social media fund and a $150 million blockchain gaming fund. This year, there’s buzz around RNDR – Render Network’s team, which is expected to launch Render 2.0 soon. The entire conference will be livestreamed on X and Solana’s YouTube channel.
CME’s notional open interest has surged to $3.57 billion, securing its position as the second-largest exchange in the trading of standard Bitcoin and perpetual futures.
The Chicago Mercantile Exchange (CME), a regulated entity, is ascending the ranks among the largest exchanges for Bitcoin (BTC) futures and perpetual futures trading by open interest, evoking memories of the initial phases of the 2020-2021 bull market.
According to Coinglass, CME has seen its notional open interest (OI) rise to $3.57 billion, elevating it to the second-largest Bitcoin futures exchange from its previous fourth-place standing just weeks ago.
Notional open interest is defined as the U.S. dollar value tied to the number of active or open contracts.
Binance, an offshore unregulated exchange, continues to dominate the market with a notional open interest of $3.85 billion, which is about 8% higher than that of CME.
However, CME has recently achieved a milestone by surpassing 100,000 BTC in open interest for its cash-settled futures contracts for the first time. Additionally, CME’s market share in the Bitcoin futures sector has reached an all-time high of 25%.
CME offers standard Bitcoin futures contracts equivalent to 5 BTC and micro contracts that are one-tenth of 1 BTC. It also provides ether futures with a contract size of 50 ETH and micro futures equivalent to one-tenth of 1 ETH.
Most of the open interest on offshore exchanges is concentrated in perpetual futures, which are unique in that they have no expiration date and employ a funding rate mechanism to align with the current spot price.
Retail investors have also contributed to this trend. Data from Matrixport shows that the rolling five-day volume in ProShares’ leading Bitcoin futures ETF soared by an astonishing 420% to $340 million last week. This ETF primarily invests in CME Bitcoin futures.
André Dragosch, the head of research at Deutsche Digital Assets, offers a different perspective. He argues that CME’s growth is more likely due to the unwinding of bearish positions on offshore exchanges rather than an increase in long futures positions.
Dragosch notes that although CME’s share in Bitcoin futures open interest has risen, the overall amount of Bitcoin futures and perpetual open interest has not seen a significant uptick in Bitcoin terms.
This suggests that the recent price surge may be more attributable to a short squeeze and a decrease in aggregate open interest.
This take doesn’t make sense.
CME’s share in $BTC futures OI might have increased relative to other exchanges but the aggregate amount of BTC futures & perps OI has not increased in BTC terms, implying that long futures positions were not the main driver behind the recent… https://t.co/9y6xAcmvznpic.twitter.com/imHZNib4ls
— André Dragosch | Bitcoin & Macro ⚡ (@Andre_Dragosch) October 24, 2023
The market is also buzzing with anticipation over the potential approval of a Bitcoin spot ETF, which has further driven up Bitcoin’s price.
Earlier this month, BTC rallied toward the $35,000 mark, largely due to market speculation surrounding the spot ETF.
The divergence between Bitcoin’s price and the sentiment surrounding it might signify an oncoming bearish trend in the future. Negative feelings and comments about Bitcoin seem to be outweighing the positive ones, potentially leading to a shift in its trajectory.
This surge in negative sentiment contradicts the surges in Bitcoin’s price and trading activity witnessed in recent days. Despite its current value at $34,100, a downturn in overall sentiment regarding BTC has emerged.
Interestingly, the correlation between Bitcoin and gold has remarkably elevated positive sentiment around the leading cryptocurrency, as it is increasingly perceived as a hedge against economic uncertainty.
At the time of writing, Bitcoin was moving toward the key $35k level with a 0.7% increase in the last day, and a solid 11.4% in the last week, according to figures by Coingecko.
Bitcoin: Appeal Increasing As Form Of Investment
Although a recent drop in sentiment about BTC has been observed – at least during the timeframes when the crypto started bouncing back and forth between the $34K level – it was gaining popularity as an investment overall.
Bitcoin’s connection with gold had reached the highest level since the banking crisis broke out earlier this year, recent data have shown.
Since the start of this year’s banking crisis, data shows that the link between Bitcoin and gold has skyrocketed. This trend is notable because it shows a growing correlation between Bitcoin and gold.
BTC’s correlation to gold is the highest that it’s been since the banking crisis earlier this year pic.twitter.com/tF5juTJx1k
This suggests a possible shift in investor behavior toward safe-haven assets like precious metals and digital currencies in times of economic turmoil.
Amidst the present economic unpredictability, traders are aggressively looking for ways to protect their investment. Gold has always been the conventional safe haven investment choice during times of unrest.
As uncertainty looms large, traders and investors are diversifying their strategies beyond the conventional reliance on gold. This evolving mindset reflects a growing interest in alternative asset classes, including cryptocurrencies like Bitcoin, marking a shift away from the traditional perceptions of wealth protection.
More traders are now setting their sights on the alpha crypto as the next big thing in investment
BTCUSD nears the halfway mark to the key $35K territory. Chart: TradingView.com
The Role Of Miners And Stability Of Bitcoin
The scarcity of Bitcoin is increasingly becoming a focal point that experts believe could have a significant impact on its future price trends. As the creation of new Bitcoins slows due to the escalating mining difficulty, the overall supply of Bitcoin is affected.
The rising mining difficulty, a reflection of the increased computational effort required to mine new Bitcoins, not only affects the supply but also influences the stability of Bitcoin.
The recent surge in mining difficulty has made the process of creating new coins more challenging. Consequently, this factor could have a profound effect on the overall supply of Bitcoin in the market, potentially leading to increased scarcity.
Source: Blockchain.com
Stabilizing The Crypto Market
The relationship between miner profitability and selling pressure underscores a crucial aspect of Bitcoin’s stability. As miner revenues rise, the reduced willingness to sell holdings diminishes the overall market selling pressure, which is pivotal for the stability of Bitcoin.
As Bitcoin gains traction as a hedge against economic instability, the ongoing debate centers on its potential to surpass gold as the new go-to safe-haven asset. The comparison between Bitcoin and gold unfolds, signaling a shift towards Bitcoin’s prominence in the dynamic financial landscape.
