Today’s News In Bitcoin

by

As a seasoned investor with over three decades of experience in traditional finance and a keen eye for emerging trends, I find myself intrigued by the current state of Bitcoin and its potential integration into mainstream financial institutions. Peter Brandt’s analysis resonates with me, as I’ve seen similar patterns in various cycles throughout my career. The prolonged period before reaching a new all-time high following a halving is indeed noteworthy, and it’s an interesting perspective to track each cycle from the previous bear market low.

Currently, Bitcoin stands at approximately $58,050, which represents a decrease of around 2.4% over the past week. Notably, its value remains within the same price range that it’s been in since February

Initially hopeful for a surge in Bitcoin prices due to their belief in an impending series of interest rate reductions by the Federal Reserve, long-standing investors found themselves weary from extended periods of stable pricing

According to analysts from Bitfinex this week, there is a possibility that growing concerns about a recession could lead to a more significant market adjustment. They anticipate that Bitcoin (BTC) may decrease by 15%-20%, which could cause its price to fall within the range of $40,000-$50,000 if a rate cut occurs during a recession

In simpler terms, a reduction in interest rates by the analysts could have positive effects on risky assets like Bitcoin (BTC). A 25 basis point decrease might set off a typical easing process, which could increase BTC’s long-term value as recession fears lessen. This would demonstrate the Fed’s faith in the economic outlook, potentially preventing a severe downturn. On the other hand, a more substantial 50 basis point cut could trigger an initial rise of up to 8% in BTC prices, but this growth could be temporary due to potential renewed concerns about recession

On this particular Tuesday, there was a notable decrease in investments in U.S. Bitcoin-based exchange-traded funds (ETFs), as indicated by a series of outflows. According to data from SosoValue, these ETFs collectively lost $287.78 million, which is the highest such loss since May 1. Among them was BlackRock’s IBIT, the largest in terms of net assets, who saw no changes in investments for that day

As an analyst, I observed a notable trend in Bitcoin exchange-traded funds (ETFs) yesterday. Grayscale’s GBTC, my second-largest holding, experienced outflows totaling $50.39 million. However, Fidelity’s FBTC led the pack with a significant withdrawal of $162.26 million. Additionally, Ark Investment Management’s ARKB and 21Shares’ ARKB, along with Bitwise Asset Management’s BITW, reported substantial outflows amounting to $33.6 million and $24.96 million respectively. Other ETFs managed by firms like VanEck, Valkyrie, Invesco, and Franklin Templeton also experienced smaller withdrawals

Amidst a general market downturn triggered by underwhelming US ISM manufacturing figures showing a contraction at 47.2% in August, although slightly better than July, there were considerable outflows taking place

Bearish Seasonality

Historically, September has often proven to be a challenging period for cryptocurrencies, adding layers of complexity to investment decisions. This month is particularly tough on Bitcoin, with the least favorable seasonal trends among all months. However, data from 2015, 2016, and 2023 reveals that even in September, there have been instances when the price of Bitcoin increased by 2%, 6%, and nearly 4% respectively. Despite the general trend of a bearish September for Bitcoin, which has been evident from 2013 to 2023, except for three exceptions mentioned above, it doesn’t necessarily mean that history will repeat itself. This year, potential rate cuts by the Federal Reserve could break this trend, making Bitcoin more attractive as a store of value amidst increased liquidity in U.S. dollars. Here’s hoping for such an occurrence

Lately, the Crypto Fear & Greed Index, which gauges investor sentiment about Bitcoin and other major cryptocurrencies, has fallen into the “fear” zone, reaching 26 out of 100. This index ranges from 0 (extreme fear) to 100 (extreme greed). The good news is that when the fear level is low, it suggests we may be approaching a local minimum

According to renowned trader Peter Brandt’s analysis on topic X, the current stretch before Bitcoin sets a new all-time inflation-adjusted high is unprecedentedly long. This prolonged period comes after its last halving event, with the 2021 peak of $69,000 remaining as the record high when accounting for inflation

Bitcoin’s Lack of Energy

In simpler terms, Brandt referred to Bitcoin’s recent price trends as showing a “lack of momentum,” noting the dissatisfaction among Bitcoin enthusiasts and new investors due to their inability to push the value beyond $73,800, a mark last seen in mid-March. Even though several months have passed since the last halving event in April, Bitcoin has not yet begun a new period of price discovery, indicating an unprecedented period of relative price stability following that significant event

Brandt employs an unusual strategy when examining Bitcoin’s price cycles. He begins each cycle at the bottom of the preceding bear market, which occurred in November 2022, and traces it up to the high point of the cycle that started after the previous low before the halving in March 2024. Notably, he points out that not only has the recent peak yet to be surpassed, but also the high from the prior bull market remains untouched when adjusted for inflation. This viewpoint emphasizes the $69,000 peak reached in 2021 as a substantial barrier, but it does not automatically mean that Bitcoin has been declining since that peak. Instead, it could indicate a resistance level without signaling an ongoing downtrend

In simpler terms, the CEO of Cantor Fitzgerald, Howard Lutnick, stated on X that conventional financial companies are interested in exploring Bitcoin as a new investment option but are held back by current U.S. regulations. Lutnick likened Bitcoin to a fresh face in the traditional finance world, gradually entering the global financial arena. He highlighted the regulatory challenges, pointing out that if a bank were to store your Bitcoin, they would need to keep an equal amount of their own funds aside, essentially tying up those resources. This, according to Lutnick, is a significant obstacle. However, he proposed that with a more lenient regulatory environment, traditional financial institutions would be eager to incorporate Bitcoin into their services

In his capacity as a key figure at Cantor Fitzgerald, Lutnick has also been active in political arenas, notably being tapped by the pro-crypto Republican candidate, Donald Trump, to head his transition team for presidency. With this background, Lutick is steering Cantor Fitzgerald towards deeper involvement in the cryptocurrency sphere, with plans to establish a Bitcoin lending business, investing a substantial $2 billion into it. This venture seeks to aid Bitcoin holders by providing them with financial leverage. The initiative extends from their existing operations, which encompass trading U.S. Treasury securities in alliance with Tether, a stablecoin issuer. Lutick discloses that Cantor Fitzgerald possesses a substantial amount of Bitcoin and aims to grow its cryptocurrency services

Trump Back in the Lead

On the betting platform Polymarket, there’s been a shift in favor towards Republican candidate Donald Trump, while Democrat Kamala Harris has seen her chances decrease. Harris’ odds have dropped from 50% to 47%, whereas Trump’s support has surpassed 50%, making him the frontrunner after a fortnight of equal chances. Over $99 million in bets have been placed on Trump, with over $95 million backing Harris. This trend is attributed to Harris’ controversial proposal to tax unrealized gains for individuals worth more than $100 million, which has faced criticism. On the other hand, Trump’s rising odds are linked to his push for a new decentralized finance initiative offering attractive returns for cryptocurrency users. However, as people learn more about World Liberty Financial, concerns are growing

 

Read More

2024-09-05 02:27