Market update
Bitcoin has been on a rollercoaster ride lately. It dropped sharply from its recent all-time high but rallied 10% mid-week on news of three potential US interest rate cuts this year. Then it fell to near the A$93K (US$61K) level following a week of outflows from the Bitcoin ETFs, recovered slowly and suddenly surged back above A$108K/US$70K overnight. Santiment reports that almost 52K Bitcoin was accumulated by wallets holding 10-10K Bitcoin on Sunday US time alone. One swallow does not a Summer make, but Rekt Capital is already musing about whether the surge marks the end of the traditional “Pre Halving Retrace “, which would make it -18% this cycle compared to -19% in 2020. At the time of writing, Bitcoin was up 5% on seven days ago to trade at A$107,729 (US$70,433), while Ethereum gained 5% to trade at A$5,541 (US$3,622). Solana pulled back 2%, Avalanche lost 6.3%, XRP and Cardano gained 2%, and Dogecoin gained 22.7%. Independent Reserve has just listed Shiba Inu, which gained 7.1% this week. The Crypto Fear and Greed Index is at 75 or Greed.
Bitcoin pulled back 5% this week — but remains up 31% over the past 30 days and is currently trading at A$103,770 (US$67.6K). Ethereum fell 12% to trade at A$5,388 (US$3,517) despite the network’s Dencun upgrade reducing fees to sub-cent levels. Part of the issue was that Solana’s soaring activity and price saw social media users comparing it very favourably to ETH’s slow and expensive L1, rather than ETH’s cheap and fast L2s. Solana surged 30%, hit a record-high market cap, and is now the fourth-largest cryptocurrency. XRP lost 8%, Cardano fell 11%, Avalanche gained 25%, and Dogecoin lost 19%, even though Elon Musk said Telsa plans to add it as a method of payment at some point. The Crypto Fear and Greed Index is at 77, or Extreme Greed.
The 2024 bull run has begun in earnest with Bitcoin trading at new all-time high prices in US dollars, up 7% this week to US$72,500 (A$109,500). Ethereum has topped the US$4,000 mark for the first time since late 2021, and finishes the week up 8% to trade at US$4,064 (A$6,138). The market cap of Bitcoin is now higher than the market cap of silver, and Coinbase is worth more than PayPal. Around 1,500 Bitcoin addresses are becoming “millionaire wallets” every day, and MicroStrategy has just bought another US$821.7M (A$1.24B) of Bitcoin. With the halving just over a month away and market pricing in US interest rate cuts in June, the future looks promising. Almost everything else was up, including Solana (13%), XRP (12%) and Cardano (2%). However, Dogecoin pulled back 1%. The Crypto Fear and Greed Index is at 82, or Extreme Greed.
Bitcoin officially broke through the A$100K barrier yesterday, and it’s at all-time highs against 14 of the world’s top 20 fiat currencies, including the euro, yen and pound. The ATH in USD is just above US$69K (A$106K), and the inflation-adjusted high is around US$78.5K (A$120.6K). At the time of writing, Bitcoin was up 24% on the same time last week and 57% for the month, to trade around A$103,850 (US$67,882). Ethereum gained 13.3% this week (55.9% for the month) to trade around A$5,506 (US$3,603). Everything else was up, including Solana (20%), XRP (18%) and Cardano (25%). Memecoins are flying with Dogecoin doubling, Shiba Inu gaining 241%, and the best-performing categories of the past seven weeks are “cat-themed memecoins” (up 199%), “fractionalised NFTs” (161%), “dog-themed coins” (164%) and “Elon Musk inspired coins” (108%). The Crypto Fear and Greed Index is at 90, or Extreme Greed. Traditionally, money has flowed from Bitcoin to Ethereum and then Altcoins; however, the Bitcoin ETFs may change that equation.
It’s been a big week for crypto with Bitcoin surging past US$54K ($83.7K) – a level not seen since November 2021, the same month that BTC hit its all-time high. Microstrategy continues to buy, snapping up another 3,000 Bitcoin this month. At the time of writing, Bitcoin was trading around A$83,743 (US$54,770), up 6% on a week ago, and Ethereum was also climbing back toward historic highs at A$4,870 (US$3,185), up 8%. Not every coin joined the party, with Solana and XRP falling 2% each, Cardano and Dogecoin were flat. The Crypto Fear and Greed Index is at 75, or Greed.
Bitcoin’s market capitalisation is back over the US$1 trillion mark (A$1.53T), and assets under management in global institutionally focused crypto funds are back at December 2021 levels – around US$67 billion (A$103B), according to Coinshares. The crypto turnaround has been pretty sudden with Coinbase’s fourth quarter report showing it has finally returned to profit for the first time since 2021 after a US$2B (A$3.1B) loss the previous quarter. It forced JPMorgan’s analysts to grudgingly upgrade the stock all the way to “neutral.” Bitcoin is currently up 4% on seven days ago and trading at A$79,840 (US$51.9K) while Ethereum gained 2.7% to trade at A$4,562 (US$2,970). Everything else was up except Avalanche (down 2.1%), including Solana (1.3% gain), XRP (6.4%), Cardano (13.1%) and Dogecoin (4.5%). The Crypto Fear and Greed Index is at 75 or Greed.
Bitcoin broke through the US$50K (A$76.4K) mark today for the first time since December 2021. Back then, we were in the grip of a retail frenzy, with Terra-Luna and FTX pumping prices, and a bunch of hype from Super Bowl crypto ads. This time around, retail interest on Google is low, and there were no Super Bowl ads – apart from President Biden’s unrelated “laser eyes” meme. “Interest rates falling, spot ETFs driving billions in new flows, halving two months away. Face-ripping rally incoming IMO,” Skybridge capital founder Anthony Scaramucci said. Bitcoin is now the 10th largest asset in the world, just ahead of Berkshire Hathaway and just behind Meta. BTC finished the week up 18% to trade around A$76,423 (US$50K) at the time of writing, while Ethereum gained 16.2% to trade around US$4,063 (US$2,662). Everything else was up, including Solana (17.1%), XRP (5%), Cardano (14.4%), Chainlink (9.3%) and Dogecoin (5.8%). The Crypto Fear and Greed Index is at 70 or Greed.
Bitcoin didn’t make any major moves this week and finishes down 1.8% on seven days ago at A$65,230 (US$42,390). Ethereum eased down by 1.3% to trade at A$3,519 (US$2,287). Solana lost 7%, Ripple fell 6.4%, and the rest – Cardano (-7.1%), Avalanche (-5.5%) and Dogecoin (-5.3%). Traditional markets are doing well, with the ASX hitting a record high, and interest rates expected to stay on hold at the RBA’s meeting today even though inflation has eased to 4.1%. There are undercurrents of danger however, with US Fed Chair Jerome Powell warning about “unsustainable” debt — the US now pays more on interest than defence — and the Chinese stock markets are in trouble. China’s CSI 1000 index fell 8% yesterday and a third of stocks halted trading. The Crypto Fear and Greed Index is at 60, with markets growing more comfortable with the performance of the Bitcoin ETFs.
It’s fair to say things aren’t going exactly to plan with the Bitcoin ETFs, with massive outflows from Grayscale sucking much of the fun out of the launch. Bitcoin finishes the week down 6.7% to trade around A$60,430 (US$39.74K), while Ethereum lost 8% and is trading around A$3,529 (US$2,317). Almost everything else was down: Solana (-11%), XRP (-8%) and Cardano (-9%), however, Dogecoin only lost 1% on hopium that the new ‘Xpayments’ account on X might see DOGE added as a payment method. A retracement in the lead-up to the halving is normal according to Rektcapital, who points out that at the same stage in the cycle in 2016 Bitcoin had lost 16%, and in 2020 it was 63%. In traditional markets, the S&P 500 has hit a new all-time high, although there are concerns that interest rate cuts won’t come as quickly as hoped. The Crypto Fear and Greed Index is at 55, or Greed.
It’s been a historic week, with the launch of multiple Bitcoin ETFs in the US marking a “potential paradigm shift in the global perception and use of digital assets,” according to Morgan Stanley. However, the expected billions have failed to flow in yet, with the SEC’s bungled approval process, investors fleeing Grayscale’s GBTC and delayed and incomplete TradFi reporting all playing a role. The Bitcoin price climbed to around A$73,000 (US$48.7K) on the 11th and then fell to under A$63K (US$41.9K) on the weekend, with Google searches for “why is Bitcoin dropping” increasing 1,100%. Bitcoin finished the week down 9.1% to trade at A$63,921 (US$42.7K), while Ethereum gained 8% to trade at A$3,771 (US$2,515). Solana fell 2%, XRP and Dogecoin were both flat, and Cardano lost 2%. The Crypto Fear and Greed Index has retreated to 52 or Neutral for the first time since October.
Bitcoin volatility increased this week ahead of the January 10 deadline in the US for a decision on the Bitcoin ETFs. The price fell below A$63K ($42K) on a report that the ETF would be denied and then surged again today on renewed confidence to top A$70K (US$47K). Alex Thorn, head of research for Galaxy, says that after ETF approvals, such sharp price action could become a thing of the past: “Volatility will likely dampen, along with inter-crypto cyclicality given AUM stickiness.” The price surge saw Bitcoin’s market cap once again overtake Facebook‘s. At the time of writing, Bitcoin was up 5% on the same time last week to trade at A$69,763 (US$47,100). Ethereum was flat this week and is trading around A$3,480 (US$2,328). Solana fell 11%, XRP lost 9%, Cardano was down 14%, and Dogecoin retreated 12%. The Crypto Fear and Greed Index is at 76 (+5) or Greed.