Chart of the Day

As a seasoned researcher with over two decades of experience in the financial markets, I have seen my fair share of market cycles and trends. Based on my analysis, the combination of positive seasonality, US elections, supply shock, and growing institutional interest presents an intriguing case for Bitcoin.


1/ Positive Seasonality.

Historically, Bitcoin tends to perform exceptionally well during the month of November.

2/ US elections.

Despite noticeable differences between Harris and Trump, it’s likely that Bitcoin would have surged no matter who won the election, considering historical trends in US elections. The reduction in regulatory uncertainty, the pro-cryptocurrency influence in the US, and the increasing appeal of Bitcoin as a strategic reserve are all factors that will speed up the mainstream adoption of Bitcoin and other digital assets in the future.

1/ The evidence is mounting that the Bitcoin supply shock has been intensifying significantly in recent times. For example, data on liquid and highly liquid Bitcoin supply from Glassnode indicates a new year-to-date low, while illiquid supply measures have reached an all-time high. This means that more bitcoins are now considered “illiquid” than ever before.

The surge in demand for US spot Bitcoin ETFs is significantly worsening an already existing shortage of supply due to halving events. Since their launch in January 2024, net investments into these ETFs have been 2.5 times greater than the rate of Bitcoin production during the same period. This trend has recently become even more pronounced, with ETF demand outstripping supply by a factor of 12.3 over the past five trading days.

The potential for a brief dip in cryptoasset prices, due to excessive optimism among investors, might present an advantageous entry point.

 

Read More

2024-11-16 15:23