As we are now less than a month away from the next bitcoin halving, the price has rebounded significantly over the past seven days. At the time of writing, the struggle continues to stay north of $70,000. The rebound observed allows for an enviable technical portrait where a test of the record highs from two weeks ago seems plausible in the short term.

The halving event, scheduled for April, is highly anticipated as it will reduce the miners’ reward from 6.25 BTC to 3.125 BTC per block. Although this could change depending on the block discovery speed, it is currently scheduled for April 20th. Traditionally, halvings tend to boost Bitcoin’s price in the following months, leading to record highs. However, the exact influences on the price are complex and could include macroeconomic factors, such as relaxed monetary policies or fiscal stimuli in response to the pandemic. In 2024, the impact of Bitcoin ETFs in the United States, which are accumulating BTC ahead of the halving, is also crucial to consider. The vast majority of analysts, supported by data from the most recent halvings, see the supply scarcity as a bullish perspective for Bitcoin.

The U.S. spot Bitcoin exchange-traded funds (ETFs) recorded a significant day yesterday with a substantial net inflow, the largest in two weeks. Recently, these ETFs enjoyed a net inflow of $418 million, signaling a turnaround after several days of net outflows during the price decline. Fidelity’s spot Bitcoin ETF (FBTC) was the main beneficiary, capturing nearly $280 million, while BlackRock’s ETF (IBIT) also attracted an impressive net inflow of $162 million. Moreover, Ark Invest and 21 Shares experienced their best day in two weeks, with a net inflow of $73.60 million. Conversely, Grayscale’s GBTC continued to see net withdrawals, with a recent net outflow of $212 million recorded. Despite these withdrawals, GBTC’s discount to its net asset value (NAV) has decreased, trending toward zero and suggesting a move towards parity. These developments assume a significant reallocation of capital between different Bitcoin ETFs.

Source: Coinglass

An unknown entity or individual, having accumulated 2,000 bitcoins in mining rewards in 2010, has consolidated these assets into a single wallet. At the time of their mining, these bitcoins were worth about $600, but their current value is close to $140 million. The transfer, conducted on March 26, consolidated 40 lots of mining rewards, each consisting of 50 bitcoins, into a single wallet. This consolidation occurred in a context where bitcoin’s value has skyrocketed, turning a modest sum into a considerable fortune. Additionally, the pooling of these funds may signal a liquidity crisis on the sell-side market, as indicated by CryptoQuant’s founder, Ki Young Ju, referencing the potential awakening of “old” Bitcoin reserves in response to market changes.

In the same vein, Arkham Intelligence recently revealed the movement of over $6 billion in Bitcoin by the holder of one of the richest Bitcoin addresses, marking its first activity since 2019. This address, ranking fifth in terms of Bitcoin wealth, holds 94,500 BTC, equivalent to over $6.05 billion at current prices. The entity redistributed these bitcoins across three different addresses, without clear ownership of the wallet being known. In short, there are gigantic movements beneath the surface of the Bitcoin ecosystem!

Investment bank Goldman Sachs has noted a significant resurgence of interest from its hedge fund clients in cryptocurrency-related products, especially following the recent approval of spot Bitcoin ETFs in the United States, as reported by Bloomberg. Furthermore, this Wall Street institution is also assessing investment opportunities in crypto bankruptcy claims. Max Minton, Goldman Sachs’ head of digital assets for the Asia-Pacific region, told Bloomberg that the approval of spot Bitcoin ETFs had spurred this investment interest, primarily focused on Bitcoin. This interest could diversify into other cryptocurrencies, such as Ether, if corresponding spot ETFs were approved in the U.S. Additionally, Mathew McDermott, global head of digital assets at Goldman Sachs, mentioned during the Digital Asset Summit in London that the bank was considering investing in cryptocurrency bankruptcy claims. He also noted that the current year marked a significant turning point from the previous year, with a clear improvement in supply, volumes, and price dynamics in the cryptocurrency market.

However, the approval of an Ethereum ETF does not seem to be guaranteed yet. The U.S. SEC has once again postponed its decision regarding the approval of Grayscale’s application for an Ethereum exchange-traded fund based on futures contracts. Initially filed in September, the application remains pending, with a new deadline set for May 30. This extended deadline allows the SEC to delve deeper into the implications and questions raised by this proposal, following standard practice in evaluating such financial instruments. Bitcoin and Ethereum ETFs provide investors the opportunity to gain exposure to the prices of these digital assets without having to hold them directly, with futures ETFs focusing on the asset’s future price and spot ETFs reflecting its current price. While the SEC has approved several Bitcoin ETFs, it has delayed its decisions on Grayscale’s and other firms’ Ethereum spot ETF applications. Some experts, such as the director of information at Bitwise, believe that delaying the introduction of Ethereum spot ETFs could benefit the market by giving the traditional financial sector more time to adjust to the recently approved Bitcoin ETFs.

Finally, it is worth noting that HSBC is positioning itself as a pioneer by launching the first real-asset product based on blockchain technology for individual investors, with the creation of its gold token. Available to customers in Hong Kong via the online banking and HSBC HK mobile app, this gold token is minted on HSBC’s digital asset platform, Orion. This initiative marks a significant step in the digitization of tangible assets, as it makes investing in gold more accessible through blockchain technology. Financial institutions are increasingly exploring the tokenization of real assets, integrating tangible assets onto blockchains, whether on private ledgers or public networks such as Ethereum. HSBC announced this project last November, highlighting its partnership with Metaco, a Swiss specialist in secure crypto-asset custody. Maggie Ng, head of retail banking and wealth management at HSBC Hong Kong, stated that the HSBC gold token, developed on the HSBC Orion platform and approved by the Hong Kong Securities and Futures Commission, represents the first product for individuals in the region that uses distributed ledger technology.

While the bitcoin dominance index has continued to rise this week, the Rivemont crypto fund remains fully invested in the leading cryptocurrency.

The presented information is as of March 27th, 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.