Bitcoin is ‘on a bull run’: Grayscale

Important facts:
  • Grayscale expects to increase retail and institutional participation.

  • Retail interest has increased, but is not yet at the peak of the previous bull cycle.

Grayscale, the company issuing the largest Bitcoin (BTC) exchange-traded investment fund (ETF), published an optimistic report for the market of this digital currency.

“Bitcoin cyclical indicators suggest that we are currently in the midst of a bullish phase.” They say In the report. The comments came as the currency was trading 4% above its all-time high of $73,700 (USD) recorded two weeks ago.

Grayscale details that a series of positive fundamental events allow the bullish trend to continue. Among them, he singles out capital flows into the United States Bitcoin ETF, launched two months ago. He emphasizes that these digital currency issuances are on average three times larger than has put upward pressure on the price, This can be seen below.

Bitcoin price (pink line) and accumulated capital of Bitcoin ETFs in the United States since launch (blue bar) in 2024. Source: Grayscale.

Grayscale says stablecoin listings on exchanges are also increasing. It should be noted that these are tokens that retain the same value as fiat currency, primarily the US dollar.

According to the ETF issuer, this means increased liquidity, that is, “it means there is more capital available for operations, whether buying or selling cryptocurrencies.” Therefore, he indicates that Promotes bull market momentumAs seen in the following graph.

Supply of stablecoins on exchanges. Source: Grayscale.

Added to this, Grayscale shows that total value locked (TVL) has increased in decentralized finance applications (defi, This not only means more liquidity, he warns, but it also indicates increased levels of user participation in the ecosystem.

Meanwhile, as seen below, BTC volume on exchanges has been low for almost a year, reflecting low selling pressure. This behavior is “traditionally viewed as a bullish indicator”, as it “suggests a preference to hold (Catch) about sales and investor confidence in the value of Bitcoin,” he says.

Bitcoin supply on exchanges. Source: Grayscale.

Meanwhile, the report points to various indicators on-chain they point towards Bitcoin Reaching the peak of the bull cycle, although there is still plenty of room for growth, For example, it showed that the MVRV Z-Score indicator has increased from negative values ​​to 3 so far in the bullish cycle.

This metric, which calculates the difference between market capitalization and realized capitalization, has historically crossed 7 points when a bullish cycle ends. This can be seen in the next graph.

The difference between market capitalization and actual capitalization of Bitcoin. Source: Grayscale.

Grayscale: Bitcoin purchases from retailers and institutions will increase

Grayscale also clarifies that Google searches for cryptocurrencies and subscriptions to related YouTube channels have increased over the past year. but be careful are significantly lower than those seen in previous bull markets Till 2020-2021.

Therefore, “it is plausible to consider that retail investors who had driven the previous cycle have not fully re-entered the market,” he noted. In this sense, it is expected to increase the participation of these actors as well as institutional investors, driven by the presence of ETFs amid favorable macroeconomic winds.

In fact, he says at this time a select group has begun to give the green light to add ETFs to high net worth portfolios managed by advisors. “This cautious but promising support signals substantial investment potential,” he concluded, reinforcing his bullish outlook for Bitcoin.

Finally, ETF issuers remember that Bitcoin has high volatility Pullback doesn’t mean the bull market is over, In line with this, as reported by CriptoNoticias, Bitfinex exchange and investment firm NDYG has advised operators to prepare for a decline of more than 10% during the surge period.

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