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  • Bitcoin Might Reach $150k by Q3 Due to Supply Shock

    • The US Fed is expected to introduce a rate cut either at the May 6-7 FOMC meeting or the June 17-18 meeting.
    • Institutions have already been buying with bigger plans in Q2 and Q3.
    • Renewed retail buying of ETFs and spot Bitcoin is expected to take Bitcoin to $150k by September 2025.

    Bitcoin Crosses $90k Decisively

    In what appears to be a short squeeze, Bitcoin has crossed $85k and $90k within the last 48 hours. This move was expected in late April due to the overwhelming buying of Bitcoins by corporate investors.

    Bitcoin Option Strike Prices with Open Interest
    Bitcoin Option Strike Prices with Open Interest

    Unable to find a way out, most short sellers have either liquidated their positions or have shifted higher towards $100k. The highest number of call options (used to short Bitcoin) now lie at $98k, which is expected to fall soon.

    According to put options data, Bitcoin now has a very strong support at $80k and is unlikely to move below these levels even if the US Fed does not make an interest rate cut.

    Recovery Should Last This Time

    The markets have emerged from severe short selling in the last couple of days, and a faint recovery has taken place in top cryptocurrencies.

    Bitcoin Recovers from $84k to $90k in 2 Days
    Bitcoin Recovers from $84k to $90k in 2 Days

    These recoveries are expected to last because of strong whale buying in multiple cryptocurrencies, primarily in Bitcoin. Both crypto native and corporate whales have bought at least $3 billion in the last few weeks.

    Further, the risk of China selling Bitcoins has been taken as positive news. Historically, whenever China has tightened Bitcoin regulations, the markets have rallied, be it in 2017 (Bitcoin Mining Ban), 2021 (Bitcoin ban), and 2025 (selling of seized Bitcoin).

    Upcoming Events That Impact Bitcoin’s Price

    The upcoming two Federal Reserve FOMC meetings are expected to aid in the full recovery of crypto markets. The first meeting is to be held on May 6 and 7, while the second meeting is scheduled for June 18 and 19.

    May 6 to 7 FOMC Meeting

    In the next FOMC meeting, i.e., May 6 and 7, the US Federal Reserve is now expected to keep the rates stable despite a demand for a cut from the US Government.

    President Donald Trump and several members of the U.S. Government have raised the demand for Jerome Powell’s removal citing the inability of the US Fed to cut rates amid a similar rate cut in Europe.

    The rate cut in the USA has become urgent because of two reasons, the first being the need to restart US industries for which there is a need of cheap loans, and secondly, the US Government needs to refinance its $7 trillion debt in 2025 which it is unlikely to do at prevailing interest rates of 5.25%.

    June 18 to 19 FOMC Meeting

    If the May FOMC meeting does not cut interest rates, the next one in June is expected to cut them. The US Fed, too, has acknowledged the need for a dovish monetary policy.

    However, if the May 6 to 7 FOMC meeting makes the cut, there is less chance of another rate cut in June to prevent inflation from rising high again.

    Expecting a Supply Shock

    Most of the sellers who had purchased Bitcoin between $80k and $100k in the previous rally are thought to have exited. This exit was visible in the retail market data, where retail ownership in Glassnode’s chart was at its lowest since November 2024.

    Opposite to this, the corporate accumulation has been rising, and as per a Glassnode’s index, corporate accumulation has increased from 0.2 to 0.6.

    Further, there is more interest pouring in from other corporations like Strategy and GameStop, both of whom are yet to make their purchases worth more than $10 billion (combined).

    Since, at present not much of the markets are in selling mode, Bitcoin could see a supply shock as soon as the Fed cuts the interest rates.

  • Bhutan’s Bitcoin Reserves Eq. to 26.7% of its GDP

    • Bhutan has a GDP of $2.8 billion, ranking 175/196.
    • Bitcoin mining has helped it accumulate $750 million in Bitcoin, 26.7% of its GDP.
    • Bitcoins could help Bhutan increase its economic situation in multiple ways.
    • Acting as a template for several developing countries aiming to lift their economic condition.

    Bhutan, one of the few completely landlocked countries of the world, has done wonders that even larger countries could not do. It has mined approximately $750,000,000 worth of Bitcoin, something which stands at 26.7% of its GDP of $2.8 billion.

    For a smaller country amidst a global tariff war, this reserve might prove criticial in ensuring economic sustaininability for the country.

    The country stands as a shining example of how Bitcoin can help a country alleviate its economic sustainability with just one wise decision.

    Bhutan Accumulates 6000 Bitcoins Through Mining

    Bhutan's Bitcoin Holdings
    Bhutan’s Bitcoin Holdings, Source: Arkham Intelligence

    Bhutan has become one of the pioneering states to acquire Bitcoins through mining. Almost all of the 13k Bitcoins held by the Himalayan nation have been acquired via crypto mining, an ingenious way of acquiring Bitcoins with limited resources, something which even major countries were unable to do.

    However, Bhutan had an advantage here, being situated between the Himalayan mountains, it has abundant hydropower to generate electricity at low cost, a critical component required to mine Bitcoin.

    While other countries remain locked in their legislation around Bitcoin, Bhutan has shown the world that taking action is far more rewarding than endless gossip in the name of policy making.

    The entirety of the Bitcoin portfolio of Bhutan has been held under the name of the King, i.e., the Druk Gyalpo Jigme Khesar Namgyal Wangchuk.

    Can Bitcoin Help Bhutan Improve Its Economic Situation?

    Bhutan’s Bitcoin holdings of $750 million are significant when you compare it with its national GDP of $2.8 billion.

    A Bitcoin reserve that is 26.7% of the GDP is one of the best things to happen to any country. Further, since the price of Bitcoin grows rapidly, beating inflation by a huge margin, continuing to hold Bitcoins would help the nation increase its economic situation very rapidly.

    How Bitcoin Helped El Salvador?

    Just holding the available Bitcoins would help Bhutan avoid any economic crisis in the near or distant future, like it does for El Salvador, a country that needs $1.4 billion for its government reforms. El Salvador, too, has been accumulating Bitcoin, and these holdings now stand at $550 million, just above one-third of the amount it needs for government reforms.

    Now, even if the IMF rejects the loan, it can easily monetize the Bitcoin reserves through lending or even using it as collateral and help its government in at least a partial manner.

    Note: El Salvador needs the $1.4 billion IMF loan over 40 years, which means it can easily use its Bitcoin reserves as collateral and raise money from elsewhere.

    How can Bhutan Monetize its BTC Without Selling?

    Bhutan has multiple ways to monetize its Bitcoin without selling it.

    • First, it could lend it at a suitable rate and earn an extra income on Bitcoin that is essentially idle.
    • Second, it could easily raise funds by using Bitcoin as collateral and using those funds to boost economic activity in the country.

  • Semler Sci. to Make 13th BTC Purchase with $500M Capital

    • Semler Scientific, a healthcare firm, is about to make its 13th and largest Bitcoin purchase of $500 million.
    • The company has applied to the US SEC to approve its $500 million fundraising (via debt) to purchase Bitcoins.
    • The SEC is likely to approve this application as it did with GameStop.
    • If the purchase goes through, Semler Scientific would make its 13th Bitcoin purchase, taking its net holdings to roughly 2900 Bitcoins.

    Semler Scientific Looks to Raise $500 Million via Debt

    Semler has filed for a fundraising approval (via debt) at the SEC, which, if approved, would allow Semler Scientific to raise $500 million.

    Though this debt seems a risky affair for Bitcoin purchase, it has been done effectively in the case of Strategy and Metaplanet, with both of these pioneers enjoying significant yield in the current markets despite the downturn.

    However, Semler’s yield is a little less and was in the negative territory for Q1, 2025, however, the price of Bitcoin has gone above its net buying price of $78k.

    As of today, Semler might be at a 5% positive yield.

    Semler seems to be inspired by Michael Saylor’s Strategy, which at present owns roughly 530k Bitcoins and enjoys a 25% yield even when the markets are at their bottom.

    Semler Scientific’s Bitcoin Purchase History

    Previously, Semler has purchased Bitcoin 12 times starting on May 28, 2024. To date, it has made 12 such purchases, with the largest to date being done in its 11th round of acquisition, where it purchased 871 Bitcoins for roughly $88.5 million.

    Below is a list of all of its Bitcoin purchase history.

    1. May 28, 2024: First purchase of 581 Bitcoins for $40 million. Bitcoin became its primary treasury reserve asset.
    2. June 6, 2024: 247 Bitcoins for $17 million, which brought their total holdings to 828 Bitcoins.
    3. June 28, 2024: 49 Bitcoins for $3 million, total holdings at 877 Bitcoins.
    4. August 5, 2024: 52 Bitcoins for $3 million, total holdings at 929 Bitcoins.
    5. August 26, 2024: 83 Bitcoins for $5 million, reaching a total of 1,012 Bitcoins.
    6. September 2024: The company purchased 6 Bitcoins for $0.4 million, with a total of 1,018 Bitcoins held by the end of the quarter 3 (Jul-Sep).
    7. November 4, 2024: 40 Bitcoins for $2.6 million, total 1,058 Bitcoins.
    8. November 6–15, 2024: 215 Bitcoins for $17.7 million, net holdings at 1,273 Bitcoins.
    9. November 18–22, 2024: 297 Bitcoins for $29.1 million, total at 1,570 Bitcoins.
    10. November 25–December 4, 2024: 303 Bitcoins for $29.3 million, net holdings at 1,873 Bitcoins.
    11. January 11–February 3, 2025: 871 Bitcoins were acquired for $88.5 million, total holdings at 3,192 Bitcoins.
    12. January 13, 2025: 237 Bitcoins for $23.3 million, total holdings at 2,321 Bitcoins.

    If the latest purchase goes through in the current markets, which is expected to happen within April. Assuming Bitcoin is at $90k by the end of April 2025, Semler would acquire roughly 560 Bitcoins, bringing its total to around 2900 Bitcoins.

    The company has been stacking Bitcoins in a similar way to Metaplanet, keeping its purchase volumes low, unlike Strategy, which typically buys in multiple billions of dollars.

    How Much Bitcoin Does Semler Scientific Hold?

    As per the calculations done in the previous section, Semler Scientific holds roughly 2,321 Bitcoins.

  • El Salvador Needs $1.4bn From Trump to Kick Out IMF

    • El Salvador might receive a $1.4 billion credit line from the USA.
    • The country has an IMF bailout following a Balance of Payment Crisis.
    • El Salvador’s Bitcoin policy has been under attack as a result of its 40-month-long IMF plan.

    Donald Trump has met El Salvador President Nayib Bukele, one of the most pro-crypto world leaders who pioneered state-funded Bitcoin purchase back in 2022.

    The agenda of the meeting might have included a possible credit line from the USA which could help El Salvador end its reliance on the IMF and follow a pro-crypto policy. The IMF had previously asked El Salvador to stop buying Bitcoins in exchange for $1.4 billion worth of loans. IMF had previously tried this anti-crypto agenda with Argentina.

    El Salvador needs the money to support its government’s finances as the country has been seeing some tough times since 2024.

    At present, El Salvador is expected to own roughly 6000 Bitcoins valued at approximately $5.1 billion at the current market price ($85k) and is one of the largest Bitcoin holders.

    Please note that officially no demand for a loan has been raised.

    Bukele in Financial Crisis

    El Salvador needs money to reform its government structure and to make it efficient.

    Last year, the Latin American country reached an agreement with the IMF that it would receive a loan of $1.4 billion over a period of 40 months to strengthen the balance of payment crisis in the country which is a way of saying that the country needs US Dollars for external trade, mostly imports.

    The two parties reached an agreement on 15 Dec 2024 and a joint press statement was issued on 18 Dec 2024 that El Salvador will agree to the guidelines of IMF and strengthen its economy.

    IMF’s Anti-Crypto Deal with El Salvador After Argentina

    For the IMF, however, strengthening the economy means moving away from crypto investments. It had warned El Salvador to stop its Bitcoin purchases and has gone to the extent of demanding the country stop buying Bitcoin via any method.

    El Salvador has been a Bitcoin pioneer among countries buying Bitcoin since March 2022 when it bought Bitcoin during the crypto winter. The Bitcoin purchases total roughly 6000 BTC worth around $550 million at the current price (i.e., $85k at press time). Despite warnings from the IMF, El Salvador purchased 12 Bitcoins in the first week of February with a sum of roughly $1.1 million.

    The IMF had previously asked the Argentinian government to curb its pro-crypto policies in exchange for sanctioning a $20 billion loan.

    Will Trump Save the Day?

    Clearly, the IMF has been discouraging multiple countries from purchasing Bitcoin which then undermines Donald Trump’s pro-Bitcoin efforts.

    Further, the sum of $1.4 billion is not a big amount for the US and if Donald Trump signs up with the deal, it could discourage the IMF from taking unnecessary anti-crypto steps.

    Previously, the IMF had gone soft on Bitcoin, calling it an “asset” following Donald Trump’s announcement of Bitcoin Reserves and the White House Crypto Summit.

  • The Strategy Effect: How Much Bitcoin Did Corporates Buy This Week?

    This week five companies together bought 7697.3 Bitcoins worth $670 million. Out of these, The Blockchain Group and KULR Technologies are new players, while Metaplanet started buying Bitcoins in 2024 and Strategy (formerly MicroStrategy).

    Listen to the Summary as an Audio Podcast.

    1. KULR Technologies – 56.3 BTC

    KULR Technologies, a leading lithium battery manufacturer has turned out to be one of the first hardware manufacturers to buy Bitcoin. This week, it has bought roughly 56.3 Bitcoins.

    KULR has been buying Bitcoins since December 2024 when its corporate strategy gave permission to its executives to acquire Bitcoin with as much as 90% of its cash reserves. Since then, the company has utilized its surplus cash reserves to acquire as much as 668 BTC (incl. the latest purchase).

    Previously, corporate Bitcoin buyers were limited to software, fintech, crypto, and finance.

    2. Strategy (Michael Saylor) – 6,911 BTC

    Strategy (formerly MicroStrategy) has emerged as a Bitcoin pioneer with its latest purchase of 6,911 Bitcoins. This purchase takes its total reserves to 506,137 Bitcoins valued at $44 billion. The company is not sitting on a 30% yield till date which is roughly $10 billion in just yield.

    Michael Saylor is the original OG of Bitcoin buying with 509k Bitcoins bought to date and had financed the entire purchase on debt. In the crypto winter, he did not sell his Bitcoins despite sitting on a $1 billion negative yield.

    MicroStrategy (now Strategy) did that and has been sitting on a $44 billion reserve that includes $10 billion in yield to date. It was the original pioneer of corporate Bitcoin buying in the world.

    3. The Blockchain Group

    French digital assets company, The Blockchain Group has spent roughly $50 million in buying 580 Bitcoins, taking its tally to 620 BTC. The player from France has emerged as the latest corporate buyer of Bitcoins.

    4. Metaplanet Japan – 150 BTC

    Metaplanet was a key pioneer in purchasing Bitcoins following the footsteps of Michael Saylor (and MicroStrategy) in 2024. The company has been raising funds to actively buy Bitcoins since the crypto markets are in a corrective mode.

    Metaplanet bought 150 Bitcoins this week, taking its tally to a total of 3350 BTC. The purchase was roughly made at a price of $85k.

    Upcoming: GameStop (Raising $1.3 bn)

    GameStop announced its desire to raise $1.3 billion in preferred shares for its willingness to purchase Bitcoins. If the company successfully raises this amount within the first half of April 2025 assuming Bitcoin would still be around $90k, it would be buying roughly 14,444 Bitcoins.

    We are still trying to find out why GameStop would need to raise funds to buy Bitcoins when it already has a $4.5 billion cash pile. Maybe this is the better way ahead: buying Bitcoins with borrowed assets, then paying off the debt or converting the money into shares.

    Frequently Asked Questions

    Why are corporates buying Bitcoins?

    Corporates are buying Bitcoins to either to make a yield like Michael Saylor’s Strategy or to make better use of their idle funds, like GameStop.

    Does the law allow corporates to invest in Bitcoins?

    The law in many countries regards Bitcoin as an asset, and by the same, any company can buy any asset as long as it is not outrightly prohibited.

    How many MSTR Shares for 1 Bitcoin?

    As per the latest available data, each Bitcoin ($87k) is equivalent to 268 MSTR shares ($325).

  • Bitcoin’s 2024 Rally Isn’t Over, Expect Sluggish Price in Short Term

    Several data points have emerged in the recent past that clearly shows Bitcoin’s 2024 rally is far from over. Data points from Rekt Capital, Ali Charts, Decentrader and Blockchain Lab confirms that Bitcoin is poised to climb much higher in 2024, than the levels that we see now.

    Bitcoin Outside of Danger Zone

    On May 02, 2024, Rekt Capital confirmed that Bitcoin was in a danger zone. This zone corresponded to a phase called post-halving consolidation where the macro-diagonal posed a strong resistance. The phase was indeed marked by high selling pressure and posed a risk for Bitcoin to fall down to $50k.

    This zone was termed as the danger zone by Rekt Capital and is displayed in purple in the image below.

    Finally with the selling phase being over, Bitcoin has now climbed above $60k, which now forms a strong support zone.

    As per the Macro Diagonal theory, this marks the beginning of the resurgence zone which may extend to $90k. It is evident that after each Bitcoin halving there has been multifold returns. The graph below shows the exact percentage returns after each halving in 2012, 2016, and 2020.

    Bitcoin Halving Dates vs Price , Source: Techopedia.com
    Bitcoin Halving Dates vs Price , Source: Techopedia.com

    Bitcoin Funding Rates Turn Neutral From Negative

    Bitcoin funding rates have turned neutral from negative this week. Data from Decentrader shows that on May 05, 2024, funding rates have turned neutral marking the end of bearishness. Subsequently, these funding rates have now turned positive which shows resurgence in the markets.

    Bitcoin Funding Rates from April 25 to May 07, 2024
    Bitcoin Funding Rates from April 25 to May 07, 2024

    #Note: Funding rate refers to the difference in Bitcoin Futures price and Spot price. If funding rates are positive, it means the market is bullish, and if they are negative, it shows a bearish market. The change of funding rates from positive to neutral marks the end of bullishness and change from negative to neutral marks the end of bearishness.

    Don’t Expect A Parabolic Rally Now

    Despite all bullishness, Bitcoin will mostly be under sideways pressure due to a few reasons.

    1. Miner Sales

    Miners still have around $5 billion worth Bitcoins that they might sell at the right moment, possibly during a rally. This selling might keep Bitcoin under pressure for a while. However, we expect the selling to stop by September 2024.

    2. 90 Day Trailing MVRV Ratio

    Historically, whenever MVRV ratio has dropped below its 90 day average, there has been a period of accumulation. This ratio has been used by traders to identify buy zones that ultimately lead to a rally. As of 08 May 2024, the MVRV ratio has just dipped below its 90 day average. See the below chart by Glassnode, shared by Ali Charts.

    3. Decline in Open Interest

    This factor is more of a short term one. The Open Interest has been in a decline since a month ago on 12th April. Both futures and options OI show the same pattern. Typically a reduction in OI with an increase in price shows short covering. Short covering rallies rarely last.

    Bitcoin Futures and Options OI
    Bitcoin Futures and Options OI

    When Bitcoin moved from $56k-$60k between 1st and 3rd May 2024, it was more of a short covering rally since Bitcoin was leveraged at the $58k support zone.

  • Bitcoin ETFs Break 7 Day Outflow Streak, Net Inflows on 3 May at $378 million

    On May 03, 2024, all major US Spot Bitcoin ETFs have recorded a net inflow. This has broken the streak of outflows for the previous 7 days. US Bitcoin ETFs had been witnessing continuous selling pressure due to recent volatility and sell offs by short term investors.

    With BTC’s price falling below the average buying price for short term investors, their selling streak has come to an end.

    Bitcoin ETFs Record Net Inflow of $378 million

    Data by Coinglass shows that on May 03, 2024, all US spot Bitcoin ETFs have recorded a major inflows. This was the first net inflow in about 8 days. Prior to this, there was a net outflow from ETFs which resulted in a selling pressure as ETFs needed to sell their Bitcoins to allow user redemptions.

    Although there were some net buying in the individual ETFs, yet the net outflow was hurting Bitcoin prices.

    Bitcoin ETF Flows from 24 April 2024 to 3 May 2024
    Bitcoin ETF Flows from 24 April 2024 to 3 May 2024

    Grayscale Spot Bitcoin ETF Records First Inflow Since Launch

    The Grayscale Spot Bitcoin ETF was born from Grayscale GBTC Trust. On the date of the approval of spot ETFs, the Grayscale ETF existed as the trust and had a size of $42 billion.

    The availability of new Bitcoin ETFs at lower fees lured investors and the GBTC trust started losing funds at an alarming rate. However, 109 days after the launch of Bitcoin ETFs, the GBTC trust (now Grayscale Spot ETF) has seen a positive inflow of $63 million.

    Despite all, the Grayscale Spot Bitcoin ETF still has the highest assets under management, i.e., $24 billion which is still much ahead of the second largest (BlackRock’s IBIT) which is at $17 billion.

    Here is a comparison of top Spot Bitcoin ETFs by Blockworks.

    Spot Bitcoin ETF Explorer as on 4 May 2024
    Spot Bitcoin ETF Explorer as on 4 May 2024

    #NOTE: In the US, ETFs are registered as legal trusts and the shares of these trusts are sold in exchanges as ETFs.

    Reasons for Renewed Buying

    Out of several reasons for a renewed buying in Bitcoin, we have identified the top most reasons.

    1. Bitcoin’s price was suppressed mostly due to short term investors who might have exited after their BTC went below their buying price.
    2. Quick recovery in Bitcoin’s price after $55k-$57k acted as a strong buying zone.

    Failed Hong Kong ETFs

    The Hong Kong Bitcoin ETFs failed to perform as the net inflows on the first day of the launch was a little above $8 million as compared to $4.6 billion inflows by US spot ETFs. Even on day 2, the inflows were a meagre $5.56 million vs 1.42 billion by US ETFs on their day 2.

  • Bitcoin’s Selling Pressure Ends as Short Term Investors Exit Markets

    Selling in Bitcoin and overall markets were severe in the last couple of weeks because of short term investors.

    Due to a bull rally prior to Bitcoin Halving, and the lofty targets given by top analysts, several short term investors saw an opportunity to make some quick money.

    However, by the time these investors entered the markets, the prices were already in the overbought zone. When these short term investors entered, the markets were ripe for a correction.

    Bitcoin Price Charts for Short Term
    Bitcoin Price Charts for Short Term

    Geopolitical events like Israel-Iran conflict, US FED interest rates and profit booking triggered a sale in the markets.

    Once selling gained momentum, the short term investors sold completely and most of them likely existed the markets. As soon as the price of Bitcoin went below the average purchase price of short term investors, the selling paused.

    Bitcoin On Chain Data

    A report by Glassnode shows that it is highly likely that these short term investors have exited the markets. The below image shows how short term investors with an average buying age of 1 week – 3 months have likely sold the most. The realized price for purchases done in the last 3 months were $62k.

    Blockchain Lab Accurately Identified Buying Levels

    This was also the support identified by us at Blockchain Lab i.e., $61.3k in the below chart. The reason why we thought the price would act as a support is due to 2 arguments.

    1. Bitcoin’s price would not experience any severe fall due to Bitcoin Halving and due to the presence of Bitcoin ETFs.
    2. Secondly, the trend lines showed that $61.3k was a very strong buying zone. This is why despite the fact that price went below this line, it immediately recovered.
    Bitcoin Supports and Resistances as on 1 May 2024
    Bitcoin Supports and Resistances Identified as on 1 May 2024

    Slow Price Recovery Ahead

    Now that short term investors have likely exited the markets, the price of Bitcoin may jump to $66k. However, we do not expect any large rally to extend unless the resistance at $72.3k is taken out.

    The presence of a huge BTC holding with Bitcoin miners could also keep prices suppressed for a while in the next few months.

  • Bitcoin Below $60k, Might Fall to $50k Soon

    In the last 24 hours starting 8 a.m. UTC on 30th April 2023, we saw a continuous fall in Bitcoin’s price from $63,200 to $57,165. The immediate reasons seemed to be Bitcoin ETF outflows, lackluster debut of Hong Kong Spot Bitcoin ETFs, miner sales and general bearishness in the markets.

    In the last few days, there has been severe consolidation in the broader markets which have left investors and traders confused as to what should be done next. In this article, we use on-chain data, fundamental metrics and technical charts to understand what could be the best course of action for the near foreseeable future.

    Bitcoin Outflow Intensifies

    US Spot Bitcoin ETFs had seen a major outflow in the last day i.e., 30 April 2024. There was $3.60 million in inflows and total outflows stood $165.20 million. at causing a net outflow of $161.60 million.

    The only Bitcoin ETF with any inflow was ArkInvest which saw $3.60 million of inflows.

    The individual outflows in and out of major Bitcoin ETFs are:

    • GBTC -$93.2 million
    • FBTC -$35.30 million
    • BITB -$34.30 million
    • BTCO -$2.40 million

    Other major Bitcoin ETFs did not see any outflows but also had zero inflow.

    A look at the trend of Bitcoin ETF flows shows that after mid-march the markets entered a profit booking mode. Net inflows slowly dropped to zero and outflows began. Still, the outflows are not as severe as they could have been, thanks to the reduced supply of Bitcoin after halving which seems to have held the price.

    Lackluster Debut of Hong Kong ETFs

    The Hong Kong ETF failed to attract investors in the Asian markets. On the first day of debut, April 29th, the net inflows were at $8 million as compared to $4.6 billion in US Spot Bitcoin ETFs on their first day.

    The lackluster performance can be attributed to the following figures:

    • Market trends
    • Bearish market sentiments
    • Excess of Bitcoins in the market
    • Availability of spot ETFs in the US which is one of the primary demand sources for Bitcoin
    • The crypto crackdown in China in the past

    Among all reasons, we believe that the crypto crackdown in China that took place around September 2021 could be a major reason for holding investors back.

    Main landers(people from mainland China) comprise a major chunk of general as well as investor population in the Hong Kong. The increase in main lander investors within Hong Kong rose majorly after the post-covid housing crisis in mainland China.

    A report by Nikkei Asia shows that 80% of inflow of people that settled in Hong Kong were from Mainland China. A special policy of “one-way permit” allows Chinese mainlanders to settle in Hong Kong along with their families.

    Since most of them have connections that tie them back to mainland China, they might get hesitant in investing in Bitcoin or any cryptocurrencies even in the form of ETFs.

    Miner Sales and General Bearishness

    Bitcoin miners might be forced to sell their mined Bitcoins to cover operational costs as well as to realize some profits.

    As per an estimate by 10x Research, miners could have been sitting on $5.2 billion worth of Bitcoins. The same report indicates that the miner holdings are alone sufficient to keep prices suppressed in the coming 6 months.

    The miner sales would not have been these worse if the general market trends had been a little better.

    The markets witnessed a net fall in Bitcoin’s price in April 2023. After starting near $69k, the markets corrected for the first week. A relief rally in the second week failed after Bitcoin couldn’t cross $70k.

    Bitcoin Charts Looks Severely Bearish for May 2024

    As on 1 May 2024, Bitcoin’s price crashed 8% on a single day, falling to $58k.

    A look at the daily charts signal that prices may fall further.

    After a failed test of resistance at $73.2k, Bitcoin priced had found support between $61k-$62k. However, on May 01, 2024, the price also broke down below this support. Now the next support seems at $50.6k.

    Bitcoin Supports and Resistances as on 1 May 2024
    Bitcoin Supports and Resistances as on 1 May 2024

    Option Data Confirms Bearishness

    Options data for Bitcoin shows that the markets are severely bearish. At a put/call ratio of 0.5, the markets are far more bearish than any time in 2024.

    Bitcoin Put/Call Ratio as on 1 May 2024 from Coinglass
    Bitcoin Put/Call Ratio as on 1 May 2024 from Coinglass

    Put/Call ratio is the comparision between put options (which signal bullishness) and call options (which signal bearishness). Ratio above 1 shows that the markets are bullish and if below 1, they indicate severe bearishness.

    Disclaimer: The above analysis is from an educational perspective and should not be taken as financial advice.

  • Altcoins Expecting a Super Rally Led by Bitcoin in 2024

    We might soon witness a super rally in almost all major altcoins. We expect a rally in the future because a post-halving rally in Bitcoin is due. Though, there are a few factors that are delaying the Bitcoin and an altcoin rally. However, we expect them to end between Aug- Oct 2024.

    Altcoins Rally Ahead as Bitcoin Enters Post Halving Phase

    The Bitcoin post-halving rally might trigger a rally in the altcoins too.

    When Bitcoin rallied from $30,000 (June 2023) to $72,300 (April 2024), we also witnessed a similar rally in altcoins too.

    • Ethereum rallied from $1900 to $4100.
    • Dogecoin tripled from $0.07 to $0.22.
    • Solana gave 13x returns from $14 to $200.
    • Shiba Inu went 3x from $0.000008 to $0.000024.
    • dogwifhat rose 15x from $0.3 to $4.5.

    Now considering this was the impact of a pre-halving rally, let us assess what could a post halving rally ( which is much greater) could impact altcoins.

    Factors Delaying an Altcoin Rally

    The Altcoin rally is pretty much dependent on the post-halving behavior of Bitcoin which itself is dependent on factors such as miners, US Fed interest rates and others.

    Miners and Their $5 Billion BTC Stash

    Bitcoin miners are estimated currently to have accumulated a stash worth of $5 billion in Bitcoins. Now as the 4th halving reduces their block rewards, they might soon find it difficult to fund operations with a reduced income.

    If Miners Sell Bitcoins

    If Bitcoin miners decide to sell their BTC holdings, an additional $5 billion worth of Bitcoins would enter the markets. As per 10x Research, that amount is sufficient to keep the Bitcoin prices suppressed at current levels ($60k-$70k) for the next 6 months.

    In this scenario, a Bitcoin post halving rally would only materialize in the latter half of 2024, possibly after September.

    If Miners Don’t Sell Bitcoins

    Assuming that miners don’t sell their Bitcoins or even if they sell, they do so at very small amounts, then the number of new Bitcoins entering the markets would be very low.

    In such a scenario, Bitcoin would rally as soon as ETF inflows start pouring in. This could be somewhere in the June – August period.

    US Government Actions

    The US crypto market is the largest market for cryptocurrencies as well as crypto ETFs. The ability of this market to buy Bitcoin depends upon macroeconomic factors like Federal Reserve interest rates, government taxation policies and other policies.

    Federal Reserve Interest Rates

    An increase in interest rates would encourage more people to save, as they can earn higher returns on their savings. Additionally, the higher cost of borrowing would deter people from taking out loans.

    Conversely, a decrease in interest rates would make borrowing cheaper, encouraging more people to take out loans. This increase in borrowing could lead to greater spending and circulation of money in the economy.

    Since Aug 2023, Federal interest rate has been at 5.33%. Being at the highest level since 2009, the high interest rates are forcing people to pay more on their car loans, property loans and student loans. Therefore leaving lesser amount of investable cash with them.

    Despite several macroeconomic problems, the US Fed has been trying to suppress inflation by raising interest rates.

    US Federal Reserve Interest Rates History
    US Federal Reserve Interest Rates History

    However, since Aug 2023, the rates has been constant because if interest rates are raised above these levels, it might bring a recession in the US economy.

    NOTE: Germany and Japan have already entered recession as on 25 April 2024.

    Now, that the inflation is still above their 2% target (3.5% as of March 2024), there is less expectation that the interest rates will fall soon. This leaves little cash with people and stops them from investing.

    US Inflation Rates from March 2020 - March 2024
    US Inflation Rates from March 2020 – March 2024

    New Taxation Policy on Bitcoin Mining

    A new taxation policy might be re-introduced for Bitcoin Miners. The US Government is looking to reintroduce a policy which could raise excise duty to 30% on electricity supplied to the Bitcoin farms.

    Expensive electricity might force Bitcoin miners to either shut their business or relocate somewhere where taxation policies are favorable.

    Mining Difficulty
    Bitcoin Mining