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After retesting the $60,000 level last Thursday, the price of Bitcoin has rebounded sharply, reaching its highest level since last July yesterday. October has historically been a particularly positive month for Bitcoin. With half of the month still ahead and the price now firmly established on the right side of the 200-day moving average, could the asset be gearing up for a bullish breakout from its long consolidation channel?
The cryptocurrency market has seen a significant inflow of funds into spot Bitcoin ETFs, with more than $556 million invested in a single day on Monday, the largest inflow since June. Among the main beneficiaries, Fidelity’s ETF captured $239 million, and Bitwise’s ETF gained $100 million, while Ethereum ETFs also attracted $17 million. This trend reflects growing institutional interest in the crypto market. Despite the lack of inflows for certain funds like those from WisdomTree and Hashdex, no ETF recorded any outflows. Analysts at 10x Research noted that Bitcoin is showing signs of a bullish movement, particularly with the decline in implied volatility between put and call options. They observed that traders are adopting aggressive strategies, such as selling $60,000 put options and buying $75,000 call options, thus positioning the market for a potential upside. If Bitcoin manages to hold above its downtrend resistance level, experts estimate the next target could be $70,000, or even new all-time highs with the approach of the U.S. presidential elections and a supportive monetary policy environment.
As of Tuesday, BlackRock currently holds 369,640 $BTC, worth over $24.3 billion, representing 1.76% of the total Bitcoin supply.
China’s new fiscal stimulus measures are certainly contributing to the current bullish momentum, as is the postponement of the payment deadline by Mt. Gox. The Mt. Gox cryptocurrency exchange, which had initially planned to repay its creditors by October 31, 2024, has pushed back this deadline to 2025. This new postponement, approved by Japanese courts, temporarily alleviates concerns of selling pressure on Bitcoin, which could drive its price down. Indeed, fears had emerged regarding a massive influx of Bitcoins into the market, which could trigger price declines, as had been seen in July when the price of Bitcoin briefly dropped below $59,000. Mt. Gox, once one of the largest Bitcoin trading platforms, went bankrupt in 2014 after a hack that resulted in the loss of 850,000 BTC. The exchange had since suspended withdrawals and filed for bankruptcy protection. The repayment plan, which includes the redistribution of 142,000 BTC, 143,000 Bitcoin Cash, and 69 billion Japanese yen, is now delayed until October 2025, offering respite to the cryptocurrency market in terms of selling pressure. This extension also allows Mt. Gox creditors more time to wait before receiving their assets, while providing temporary relief to the Bitcoin market, which may avoid heightened volatility due to massive sales.
Vitalik Buterin, co-founder of Ethereum, has proposed major improvements to make the Ethereum network faster and cheaper to use. In a blog post, he explored adjustments to Ethereum’s proof-of-stake model, notably by lowering the financial threshold for solo validators, currently set at 32 ETH ($84,000), to 1 ETH ($2,600). According to Buterin, this would allow more people to participate in the transaction validation process by eliminating one of the main barriers to participation. At the same time, he emphasized the need to improve transaction finalization speed, which currently takes about 15 minutes. Buterin proposed the idea of “single-slot finality,” which would reduce this time to just 12 seconds, making transactions faster and more secure. This change would align Ethereum’s performance with that of more centralized, performance-focused blockchains. However, he acknowledged that several technical approaches would be necessary to implement this improvement, including the use of advanced cryptographic technologies. These proposals come as Layer 2 networks increasingly spark debates on how to reduce transaction costs. As Ethereum prepares for its next major update, Pectra, scheduled for next year, these changes could alter how validators operate and further improve the network’s performance.
Securitize, a company specializing in real-world asset tokenization, has launched a service enabling conversion between Circle’s USDC stablecoin and U.S. dollars for BlackRock’s institutional digital liquidity fund, BUIDL. This integration aims to reduce investment costs and simplify the subscription process for traditional investors interested in this fund. In collaboration with BlackRock, Securitize issues BUIDL tokens on the Ethereum blockchain, offering increased transparency and faster transactions, facilitated by Zero Hash, a blockchain infrastructure company. The BUIDL fund, recently valued at $550 million, is one of the largest of its kind. It allows institutional investors to generate returns on their U.S. dollars by purchasing tokenized shares backed by secure assets like U.S. Treasury bonds. This trend toward real-world asset tokenization is gaining traction, particularly since the approval of the first Bitcoin ETFs by the U.S. SEC in January. Securitize’s initiative aligns with the growing popularity of tokenized real asset funds, with new collaborations and launches in the sector. Among these new funds, players such as Guggenheim Treasury Services and Midas have introduced similar products, while others like Ondo Finance and Mountain Protocol have begun using BUIDL to support their yield-generating products. Key benefits for investors include enhanced liquidity and instant, transparent blockchain transactions.
Coinbase has asked a Washington, D.C. court to rule on a request to obtain documents from the SEC regarding the application of securities laws to cryptocurrencies, particularly Ether. This request follows Coinbase’s lawsuit against the SEC for non-compliance with Freedom of Information Act (FOIA) requests. Coinbase is seeking internal and external communications related to the SEC’s investigations into the classification of cryptocurrencies as securities, a crucial issue for the industry, especially regarding Ethereum. The SEC has sued Coinbase for operating without registration and has increased its actions against crypto platforms in recent years. However, Coinbase claims that the SEC has refused to provide the requested documents, initially asserting that the agency was exempt from FOIA, but has since changed its position. According to documents filed Tuesday, the SEC has indicated that it would take three years to produce the requested documents. Coinbase and its partner History Associates are also pursuing similar requests regarding closed investigations involving Zachary Coburn and Enigma MPC. Meanwhile, Coinbase is also investigating the FDIC’s “pause letters,” which have asked some financial institutions to limit their crypto-related activities. Coinbase views these letters as part of a broader operation to restrict the crypto sector, dubbed “Operation Choke Point 2.0.”
Kamala Harris has taken an explicit pro-crypto stance as part of her campaign by announcing a program supporting digital assets, specifically aimed at Black men. In a document titled “Kamala Harris Will Deliver for Black Men,” she commits to establishing a regulatory framework to protect holders of cryptocurrencies and other digital assets, emphasizing the importance of access to financial and banking services through these new technologies. This initiative is part of a broader effort to attract Black male voters, a crucial base for Democrats. This position marks a significant shift for Harris, who had previously addressed the topic of cryptocurrencies more generally without proposing concrete policies. This announcement also contrasts with that of her opponent, Donald Trump, who had already expressed support for digital assets. In addition to her pro-crypto policy, Harris also promises other measures to win over Black men, such as the legalization of cannabis, the provision of fully forgivable loans for Black entrepreneurs, and the creation of training and mentorship programs for high-paying jobs. Harris’s commitment to cryptocurrencies, in this specific context of regaining Black male voters, reflects an attempt to consolidate an essential electorate for Democrats, particularly ahead of the 2024 elections.
MicroStrategy, led by its co-founder Michael Saylor, is positioning itself as a future “Bitcoin bank” with ambitions to reach a trillion-dollar valuation. Since 2020, the company has acquired around 252,200 Bitcoins, worth $15.8 billion, making it the largest publicly traded company holding Bitcoins. Saylor compares Bitcoin to a monetary tech network, similar to Google or Facebook for money. MicroStrategy’s goal is to create financial instruments based on Bitcoin, such as shares, convertible bonds, and fixed-income instruments, allowing investors to capitalize on Bitcoin’s performance while diversifying their risks. MicroStrategy’s strategy relies on raising capital through financial products, such as convertible bonds, to buy more Bitcoin, thereby maximizing returns. This innovative approach, according to a report by Bernstein Research, positions the company as a leader in the digital asset ecosystem. The report rates MicroStrategy as “Outperform,” with a price target of $290, reflecting a potential 39% upside from its current price. Saylor, highly optimistic about Bitcoin’s future, believes that each coin could be worth millions of dollars, justifying the company’s current strategy. By aiming to become a trillion-dollar company, MicroStrategy aspires to join the ranks of giants like Apple, Microsoft, and Amazon, which have already reached this milestone.
According to Geoff Kendrick of Standard Chartered, Bitcoin could reach its all-time high of $73,800 before the U.S. presidential election. Several factors are driving this bullish trend, including the increased chances of Donald Trump’s victory, significant investment inflows into spot Bitcoin ETFs, and growing activity in Bitcoin call options. Last Monday, U.S. spot Bitcoin ETFs recorded their largest single-day net inflows since June, totaling $555.8 million, while open interest in $80,000 call options for December also increased. Kendrick also highlighted MicroStrategy’s role in Bitcoin’s institutional adoption. The company holds over 252,000 Bitcoins, and its stock valuation has outperformed Bitcoin in recent weeks, partly due to a new accounting exemption that could allow MicroStrategy to lend its Bitcoins, generating additional revenue. This strengthens the notion that
MicroStrategy could become a “Bitcoin bank,” developing financial instruments linked to cryptocurrency. Finally, Kendrick notes that even if Trump does not win, the broader trend toward greater digital asset adoption remains intact. The growing interest in digital assets, Bitcoin ETFs, and favorable political developments offer positive prospects for Bitcoin and the cryptocurrency market in the months ahead.
Bitcoin has rebounded by more than 25% since its September low of around $52,546, and several on-chain and technical indicators suggest that this bullish trend may continue toward new all-time highs. Open interest on perpetual futures contracts has reached a record $19.7 billion, indicating increased liquidity in the market. Although this raises volatility, overall trader sentiment remains bullish, supported by positive funding rates and a reduction in Bitcoin supply on exchanges, reinforcing the idea that investors prefer holding their BTC. Institutional demand for spot Bitcoin ETFs also continues to grow, with positive inflows recorded on several days. On October 14, these investment products saw their largest net inflow since June, with over $555.8 million invested, reflecting increased interest from professional investors. Additionally, optimistic forecasts based on indicators such as the monthly RSI suggest that Bitcoin could reach up to $233,000 by the peak of the next bull cycle, potentially in 2025.
Finally, Bitcoin recently crossed above the 200-day simple moving average, currently at $63,335, which could favor a parabolic upward movement. Data shows that this price zone benefits from solid technical support, suggesting that the path of least resistance for Bitcoin is toward new highs.
The presented information is as of October 16th, 2024, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.
