Monthly Archives: January 2024

Bitcoin rebounded overnight after falling some 20% from its $49,000 high earlier in the month. Two things will drive the cryptocurrencys recovery, according to analysts.

Noelle Acheson, author of the Crypto is Macro Now newsletter and former head of research at Genesis, said on X that the drop experienced over the past two weeks will likely to be short-term, as ETF-related buying will continue as GBTC exits wane, and as geopolitical tension pushes more savings into a hedge asset.

The slide in prices showed signs of subsiding overnight.

Having fallen below the $39,000 mark, Bitcoin is now back trading over $40,000 by 1 pm UK time, up 3% since Tuesday.

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In the meantime, were seeing a glimpse of market sanity, she said as mispriced rates outlooks are being corrected.

Its happened often before, and given the tailwinds ETFs, halving, currency turmoil the market is likely to recover, especially as dip-buyers step in, Acheson said.

The recovery follows the US Securities and Exchange Commissions approval of 11 spot ETFs earlier this month, bringing Bitcoin exposure to American investors and institutions.

In the end only 10 of the issuers approved launched spot Bitcoin ETFs, as Hashdex decided not to convert its existing futures ETF into a spot fund.

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The halving refers to the process in which the network automatically, irreversibly halves the amount of Bitcoin miners can earn from appending blocks of verified transactions to the Bitcoin ledger.

Based on current estimates, the next halving will happen around mid-April.

So why did Bitcoin wobble?

The arrival of spot ETFs followed the old Wall Street adage of buy the rumour, sell the news, said Chris Kuiper, director of research at Fidelity Digital Assets.

Open interest, the total number of futures contracts held by market participants, rose towards the end of 2023 in anticipation of ETFs, Kuiper said, and the speculative fever could also be seen in the spike in perpetual futures funding rates.

The recent spat of selling and downward trend in prices doesnt suggest the long-term bull market trend has been broken, Kuiper concluded.

Furthermore, nothing in the core Bitcoin investment thesis has been invalidated, he added.

Fidelity Digital Assets research chief had warned that volatility could spike just a week before ETFs were approved and Bitcoin began to drop.

Grayscales GBTC has seen near $4 billion in outflows since the fund converted to an ETF, causing a drag on the price of Bitcoin, according to JPMorgan.

Investors had been locked into GBTC for years, including bankrupt firms such as FTX and BlockFi. The conversion to an ETF offered an off-ramp for firms in need of liquidity, and likely explains some of the selling pressure in recent weeks, according to JPMorgan.

Grayscales is also feeling the heat from other firms including Wall Street giants BlackRock and Fidelity that charge investors a fraction of GBTCs 1.5% management fee.

BlackRock, the worlds largest asset manager, charges just 0.12%, 138 basis points lower than Grayscale.

While the GBTC selloff has been labelled a drag on the price of Bitcoin, another factor was the changing macroeconomic outlook.

In December, the US Federal Reserve made several dovish signals, which traders took to mean that interest rate cuts were on the horizon. Consequently, the price of Bitcoin went up.

Those hopes are now fading as traders change their outlook on rates. The market prices in a 75% chance of an interest rate cut in March just one month ago, this has since fallen to 50% on the back of hawkish statements from central bankers.

Lower interest rates benefit risk assets like Bitcoin as investors take more risk in search of returns.

Bitcoins 24/7 nature means it can often adjust to changes in outlook and sentiment ahead of other assets. Its often a better indicator of liquidity sentiment than stocks, in that it is one of THE most sensitive assets to monetary conditions, said Noelle Acheson.

Over the past few days, weve seen a steep revaluation of rate cut expectations. Bitcoin is reacting to that, while stocks arent, she said.

Eric Johansson is DL News News Editor. Adam Morgan McCarthy is a Markets Correspondent at DL News. Tyler Pearson is a Junior Markets Correspondent at DL News. If youve got a hot crypto tip, please reach out to us at eric@dlnews.com, adam@dlnews.com and ty@dlnews.com.

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These two drivers will fuel Bitcoin's rebound: 'It's happened often before' - DLNews

Citing historical data, prominent Bitcoin and crypto analyst Ali Martinez predicts that there are more than 20 months of bullish price action still ahead for BTC.

The price of Bitcoin has struggled in the days following the approval of spot Bitcoin ETFs in the United States. The leading cryptocurrency shed more than 20% of its value from the recent highs, dropping to as low as $38,500 earlier this week.

However, this bearish price action could be short-lived, according to Ali Martinez. In a recent update, the prominent analyst pointed to historical charts as evidence that Bitcoins best days are yet ahead.

The analysis made comparisons between Bitcoins current price and its performance in the previous four-year cycles.

It forecasts that if Bitcoin follows the pattern set in the past bull run and the duration between market bottoms, then there are still 600 days of bullish momentum ahead.

Notably, Bitcoin saw market bottoms between 2015 and 2018 at $185 and $3,200 respectively. Similarly, the market set hit its lowest point in four years in 2022, when Bitcoin traded close to $16,000 off the back of the FTX collapse.

By considering the average period that elapsed between the markets, setting a new lowest point, Ali Charts notes that Bitcoins next market peak should come in October 2025 (or more than 20 months from now). At that point, the market will witness a sell-off that sets it on course for a new bottom.

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Bitcoins price action over the past 48 hours tends to support the thesis that its best months are yet ahead. Since hitting a new monthly low of around $38,500, the leading cryptocurrency has bounced back, reclaiming the $40,000 mark several times within the period under consideration.

At the time of writing, Bitcoin is trading at $39,962, representing a less than 0.1% decline in the past 24 hours. Bullish investors remain hopeful that BTC will continue its fightback and recover lost ground in the days ahead.

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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basics opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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Top Analyst Says 600 Days of Bullish Momentum Still Ahead for Bitcoin - The Crypto Basic

Exchange-traded funds come in many shapes and sizes. Some are plain vanilla, diversified index funds that let you invest in the entire stock and bond markets, and are excellent core holdings for the great majority of people.

Then there are the quirky, narrowly focused E.T.F.s like the Inverse Cramer Tracker, which enables you to bet against the stock picks of the CNBC television host Jim Cramer. The fund is legal, approved by the Securities and Exchange Commission and a money-loser since its inception last year. Betting against Jim Cramer just isnt a great investing strategy.

Neither is fear of missing out. Yet FOMO is the main reason for putting money into Bitcoin, which remains highly speculative, difficult to categorize and without an immediately identifiable economic function.

The S.E.C. this month approved 11 new E.T.F.s that track the price of Bitcoin, and the decision has been heralded by promoters of Bitcoin and of the new funds as an important event, legitimizing Bitcoin as an asset class.

I dont think so.

The S.E.C.s action, in itself, doesnt give Bitcoin any new stature. It merely adds Bitcoin funds to a long list of E.T.F.s that are perfectly legal and simple to buy, but that dont belong in anybodys core portfolio. Id put the Inverse Cramer Tracker in this category, as well as E.T.F.s that track a single stock like Tesla, PayPal or Nvidia, or that use leverage to triple a bet on energy prices or quadruple one on the S&P 500. I could go on and on.

Simply being legal doesnt make a strategy sensible for most investors. In fact, while approving the Bitcoin E.T.F.s, the agency also issued an explicit warning against FOMO investing in so-called digital assets as it has done many times before.

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Bitcoin Funds Are Here. But You Probably Dont Need Them. - The New York Times

Asset management firm Bitwise made the Bitcoin (BTC) addresses of its spot BTC exchange-traded (ETF) fund public, roughly two weeks after the shares were made available for trading.

In a Jan. 24 X post, the firm announcedthat anyone can verify holdings for its Bitwise Bitcoin ETF, which trades as BITB on the New York Stock Exchange Arca. At the time of publication, the address provided by Bitwise contained 11,858.63 BTC, worth roughly $465 million.

Onchain transparency is core to Bitcoins ethos, said Bitwise. Were proud to walk the walk with BITB. [...] Publishing on-chain addresses is a first step toward increasing public transparency.

The United States Securities and Exchange Commission approved Bitwises spot Bitcoin ETF offering on Jan. 10, along with 10 other applications from asset management firms. Its unclear if other companies plan to release BTC addresses for their investment vehicles in the future. On Jan. 22, Arkham Intelligence claimed to have identified several wallets linked to ETFs, including those from Bitwise, BlackRock, Fidelity and Franklin Templeton.

Related: Bitwise launches crypto ETF media campaign with The Most Interesting Man in the World

Bitwise co-founder and CEO Hunter Horsley said on X that the firm had released the BTC address in response to clear feedback from investors. An X poll launched by Horsley on Jan. 23 showed that 91.1% of 2,416 respondents favored the BTC holdings being made public.

Bitwise is the first and almost certainly not the last to post their Bitcoin address for BITB, said ETF analyst James Seyffart on X.

Roughly seven days after its launch, BITB was in the top 5% of ETFs by assets under management in 2023. There was roughly $76 million in net outflows for all spot BTC ETFs on their seventh day of trading, with Grayscales GBTC leading in the largest net outflows.

Magazine: Big Questions: Can Bitcoin payments rise again?

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Bitwise releases wallet addresses of spot Bitcoin ETF holdings - Cointelegraph

Coinbase may face challenges due to decreasing Bitcoin values and declining interest in Bitcoin ETFs, as per insights from JPMorgan Chase & Co.

Coinbases shares plummeted by 6.2% on Tuesday, as the downturn followed JPMorgans decision to issue its first negative assessment equivalent to a sell rating on the company since it began tracking the stock in May 2021.

Despite a significant upsurge of nearly 400% by the end of 2023, Coinbases shares have mirrored the trajectory of Bitcoin, which saw a remarkable increase in the same period. In 2024, Coinbases shares have decreased by 30%, while Bitcoins value has fallen by approximately 8%, recently trading under $40,000.

Analysts at JPMorgan anticipate a further decline in enthusiasm for cryptocurrency ETFs. This could result in lower token prices, decreased trading volumes, and fewer secondary revenue opportunities for entities like Coinbase. Analysts also think the ETF hype that drove Bitcoin out of the crypto winter wont ultimately live up to the bull market expectations.

The outlook on Coinbase is becoming increasingly cautious, with the stock receiving 12 sell ratings, eight buy ratings, and eight hold ratings, as compiled by Bloomberg. Last week, CFRA downgraded its rating to sell, citing concerns over intensifying market competition.

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Coinbase faces headwinds as Bitcoin and ETF interest dips, says JPMorgan - crypto.news