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MikybullCrypto 237 days, 5 hours ago


Key Takeaways;

Bitcoin performance in light of Institutional Spot ETFs filing.

Long-term outlook

Volume data

Before I dive into highlighting and pointing out relevant financial data that would aid you in navigating through the market and making an informed investment decision, it is vital to disassociate from the herd across the media. Bitcoin’s performance vis-a-vis the equities and bonds from the inception of this year is more than average but its drawdown from ATH is still above 50%. Bitcoin is neither in a bull nor bear market but simply in an accumulation phase. The price rally was largely spurred by derivatives. Spot volume and liquidity are still lagging and low since 2020. Bitcoin still consolidating and unable to break $31k. There is a possibility of a price reaching above that area for a liquidity grab before correcting within the range of 29k to 28k. Bitcoin mining stocks have surged between 280% and 420% YTD, outperforming spot BTC prices. Bitcoin network remains strong and experiencing exponential growth. The hash rate is at ATH at the time of writing despite the regulatory action on the space. Bitcoin hodlers remain in accumulation mode. Bitcoin Realized Price has started growing for the first time since the beginning of the 2022 year.

Institutional accumulation

Funds holding

Since Blackrock filed a spot ETF, BTC held by funds is on a parabolic rise. According to the Santiment, Whales holding between 10 to 10k btc have increased their holding by 71k btc in mid-June this signifies a steady accumulation.

Bitcoin OTC Balance

Bitcoin supply on OTC trading is at a year high. This attested to the increasing institutional interest in Bitcoin. Spot ETFs approval will witness more institutional adoption and flooding of liquidity in the crypto market. According to the former SEC Chairman Clayton “The fact that we have these institutions that know markets better than anybody and saying we’re going to put our reputation behind it, I find that pretty remarkable..”. Approval of spot ETFs probability is above 50% considering the top behemoth institutions that have considerable sway in government.

Macro Outlook

Swissblock Unemployment versus BTC

The labor market remains strong and resilient despite the aggressive rate hikes and M2’s significant decline meanwhile the probability of recession is now above 55% in 2024(using LEI). Another major macroeconomic concern is CRE. The value is on a constant decline (-11%) and Morgan Stanley stated there is the possibility of declining to about -40%, this doesn’t bode well for regional banks that have big exposure to CRE loans.

US interest expense

US debt since the suspension of the debt ceiling has increased by a trillion dollars meanwhile the interest payment expense is on a parabolic rise. This is a kind of QE. My main issue is the unsustainable debt cycle that the US has plunged itself in. Debt is good but when the marginal debt productivity is constantly diminishing then it becomes a problem. The chart below will give you an interesting overview of this debt vicious cycle. Bitcoin and gold have become hedges for major investors.

Diminishing returns from the US debts

Bitcoin Long-term Outlook

Bitcoin long-term projection

Bitcoin’s long-term outlook looks promising. Using different metrics like a log scale, and Bitcoin halving period price cycle all agree on this projection.

Bitcoin projection when the spot ETFs approved

When the first gold ETF was introduced back in 2004, the gold price began a nearly seven-year bull run and gained 359% in value.

If any Bitcoin ETF spot launches soon, bitcoin could see similar price action as it unlocks Bitcoin exposure for the masses.

Bitcoin halving perspective

We have better days ahead.

Await my update on CPI data coming out tomorrow. I hope you find this brief market insight helpful and remember the information I provided doesn’t constitute investment advice.

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