The central banks are capitulating, the liquidity spigots are opening, and
#Bitcoin
is about to go much higher.
My composite global liquidity momentum model (MSI), has provided the first Bullish regime signal since November 2023. Recall that Bitcoin rallied 75% from Nov to
Introducing Bloomberg Intelligence's new Crypto Ecosystem (PoS Assets) Fundamentals Dashboard. We're expanding coverage beyond the two assets that we considered to be institutional-grade quality (BTC, ETH) to the wider proof-of-stake (PoS) ecosystem. A 🧵 on why
The
#Bitcoin
energy narrative is flipping! A new note out this morning on the Bloomberg Terminal looks at the rapid rise of sustainable energy sources in $BTC mining
🧵
#crypto
has taken a pounding over the past six months as the
@bitformance
Top 200 equal weight index chart below shows.
-55% pullbacks in line with the previous 2 cycles. The market also rallied hard 6 months prior (+241%).
For traders, the price will need to break out of
Its all linked -- Central Bank liquidity-> Global M2-> Bitcoin Price-> Crypto Prices-> Crypto Users
The liquidity cycle bottomed in Q4 2022 as did users of smart contract blockchains. However, the liquidity cycle only impacts the rate-of-change of adoption. Consistently,
#Bitcoin
is facing some macro headwinds, with several indicators in my macro state regime model turning negative in recent weeks. However, the longer term liquidity cycle remains extremely favorable for $BTC and
#crypto
in general.
Lets dive in 🧵
In a debt-based fractional reserve financial system, the money supply must continually expand to support the outstanding debt. Otherwise, everything will collapse. This is the natural state.
#Bitcoin
Australia is home to the 3rd largest
@RealVision
community worldwide! Last night's drinks on Sydney Harbor for RVIP members showcased the amazing connections built by
@RaoulGMI
and the team over the past decade, delivering data-driven macro and
#crypto
analysis to the masses.
The market became myopically focused on the
#Bitcoin
ETF narrative, ignoring the excessive leverage and positioning in the derivatives mkt. Since when are funding rates at 60-70% annualized a Buy signal?
Now the leverage is getting washed out, rinse, repeat, and bull mkt
“We estimate $220B of incremental flows will come into the
#Bitcoin
ETFs over the next three years...if we are directionally correct on the level of net ETF inflows ....applying our estimate of the current multiplier of new capital of ~25X, this alone could drive a $5.5T bitcoin
Unless something fundamentally has changed, we are entering what
@RaoulGMI
refers to as the 🍌zone, or what I would describe as
#Bitcoin
batshit season.
Over the past decade,
#Bitcoin
has had a tendency to trough several months before the bottom in global M2. Then it rips, gets way ahead of the move in liquidity, and has a mid-cycle correction.
Now, momentum in global liquidity is starting to accelerate higher while all the
Meanwhile, the Chinese are back at it.
Going back to 2016, these injections by the PBoC has seen
#Bitcoin
appreciate by at least 100% in the following months.
(h/t
@BittelJulien
)
US Dollar Cycles &
#Bitcoin
Bull mkts. The trend support line is arbitrary. The point is that $BTC experiences the highest velocity upside move when the dollar breaks lower. If the DXY is weakening from here it's being coordinated by the Fed and global liquidity is being
What
#bitcoin
price action has done this week from a technical standpoint is the equivalent of the breakout above $10,500 resistance in July 2020. Price has cleared a massive supply overhang—the largest in its history. Whilst there will be pullbacks, as we saw in Q3 2020, price
The
@Paypal
announcement is not priced in.
#Paypal
has 435M active accounts vs
#Ethereum
L1/L2 Active Addresses 1M.
If 1% covert a $ balance to $PYUSD (4.35M) and begin to use it then the ramifications for the
#Ethereum
ecosystem and $ETH, the asset, are massive.
#Bitcoin
MVRV Z-score is >3.
My thesis remains that passive ETF buyers, Corporates, ESG managers and SWFs will come in this cycle, pushing it to around 5-6. Super Cycle theorists say more.
We shall see. Gravity will matter at some stage.
The difference this time vs past
By 2030, the combined market value of smart contract platforms, driven by the expanding use by
#AI
agents could reach between $15 trillion and $25 trillion.
AI x Blockchain Growth Model (excerpt from
@RealVision
Pro-Crypto November 2023 report)
"In the previous scenario, I
#Bitcoin
is entering Belief / Denial zone. This is when 25-30% pullbacks can start appearing regularly. Make no mistake, the compulsion to sell will inflict itself on every holder.
However, onchain, we can see, based on metrics like illiquid supply/long-term holders etc, that
I am stoked to announce that I have officially joined
@realvision
as their Chief Crypto Analyst. For a decade, I have been a subscriber to what is, hands down, the best macro and financial content platform in the market. Few have been more influential than
@RaoulGMI
on my journey
🚀Why this
#Bitcoin
rally has the potential to reach prev ATH pre-halving;
1. All the extreme leverage and positioning from Q4 has been cleansed (for now). Options OI is down 40%, and Futures funding rates are still positive but less exuberant
2. ETFs continue to outpace
#Crypto
breadth analysis: Top 200 Equal Weight vs. Mkt cap weight ratio at extreme bearish levels.
Currently, it’s -2.8 StDevs ~ a bearish extreme that only hit on 3 previous occasions.
• 2021: During a bull market that proved to be an excellent re-up for the cycle.
•
The FDIC has reported that 63 US banks are on the brink of insolvent collapse -- this is due to banks sitting on $517 billion in unrealized losses.
Meanwhile, after some nice coiling pricing action since March, my boring
#Bitcoin
Trend model triggers.
DXY down, Yields and Corp
I am expecting my
#Bitcoin
trend model to trigger in the next day/s.
A decent amount of volume traded around $62k-$63k level which should provide key support.
Derivatives mkt, NUPL levels, ST realized cost basis have reset in what has been a healthy pullback and reset.
2009 is to Millennials what 1982 was to Boomers.
The NASDAQ launched in the 1970s but wasn't considered a serious investment venue until the mid-1980s or early '90s. Since then, it has outperformed all other markets.
#Bitcoin
launched in 2009 and, for its first decade, was met
Glasshouses. A long note.
Recently, there has been an uptick in hate directed at
@GMIRaoul
. The public square invites it, but folks should also show some humility.
Raoul's elucidation of the macro complex: debt, debasement, demographics, and subsequent work on network value
How hard is it to track the sector performance in the
#crypto
market?
Most retail focused websites have done a lousy or half-baked job at implementing proper robust classifications.
Even if you have a
@Bloomberg
, their classifications (which I helped build) are limited to the
Bitcoin's Collateralization Mission
I wrote a report for Pro-Crypto subs
@realvision
last month -- below is a🧵and for those with no patience, the TL;DR;
The global order is shifting: U.S. Treasuries lose appeal, gold re-emerges, and trillions in assets get tokenized on
Ethereum's Layer-2 Bull Cycle has begun. And with the supply side boost from the Merge in the rearview, the market should hone in on the demand dynamics, which are beginning to drive significant network effects. Ethereum on-chain fundamentals update 🧵
The adviser to the front-runner for president and the independent candidate propose backing the USD dollar with
#Bitcoin
. The Overton window has shifted.
The 2nd half
#Bitcoin
bull markets have had the benefit of a declining dollar (driven by improving liquidity). The $DXY tends to peak (green line) after liquidity & $BTC bottom in the 12 months prior before rolling over. This supercharges all risk assets (denominator goes down)
What will happen when Sustainable investing funds realise
#Bitcoin
is the single best
#ESG
investment on the planet?
Bitcoin mining facilities capturing methane from landfill and flared gas are offseting 7% of the total emissions, and this is rising fast.
If this tech is
As we noted previously, growing interest in Bitcoin mining by nation states reflects miners' ability to monetize stranded and excess energy (mainly from renewable and nuclear sources), while helping to balance and modernize power grids.
#Ethereum
demand has yet to turn a corner despite a spike in usage metrics over the past week, fueled by merge-related activity. We don't expect to see the price improve until the bleed in priority fees stabilizes.
#ETH
Adoption Overview🧵
In the Dec-23
@Realvision
Pro-Crypto report, I discussed strategies to outperform in the bull cycle, especially the Alt-Season phase.
Drilling into the ETH vs. BTC ratio, here is a quick technical update, including the momentum strategy for navigating the 🍌zone.
🧵
A discussion on global liquidity, par excellence with
@crossbordercap
@RaoulGMI
"The current regime is characterised by monetary inflation and insolvent governments" - Howell
#Bitcoin
,
#Gold
, Technology and
#Crypto
Allocate accordingly.
In hindsight,
#BlackRock
's massive
#Bitcoin
spot ETF play shouldn't have been that surprising. Along with other behemoths (Vanguard, StateStreet) who espouse
#ESG
-driven investing principles, they started scooping up public mining stock back in 2020
ESG, Institutionalization🧵
What drives
#crypto
assets?
Answer: network adoption.
But drives network adoption?
Answer: Intrinsic (e.g. technology) & External (macro, societal) factors.
Today let's focus in on the external i.e. macro, and a critical indicator for liquidity🧵
The Sovereigns are here and the impact they will have on the
#bitcoin
network is not priced in.
When I first wrote my reports on nation-state
#Bitcoin
mining mid last year, its strategic importance as a hyper advanced energy technology and its new geo-political status seemed
The dual surprise of faster L2 adoption and less than expected cannibalization of the L1 financials has⬆️our confidence in
#Ethereum
's potential to accrue more value than alternative L1s over the cycle.
A🧵on the changing dynamics of $ETHs network fundamentals from the⬆️in L2s
While a significant % of mining occurs privately and off-grid, estimating energy use remains an imperfect science. Its also an incredibly fast moving industry. That said,
@DSBatten
modelling appears more accurate vs Cambridge. He has Sustainable energy source > 53% and⬆️
Earlier this year, something big happened in
#Bitcoin
's ascendency to global reserve asset status. US depositors got an all too real taste of what it must be like to live in developing countries with fragile financial systems.
In March 2023, for the first time,
#Bitcoin
#Bitcoin
might very well be the last functioning fire alarm.
Over the past month, most metrics on my Macro & Liquidity dashboard have moved favourably:
DXY ⬇️
UST Yields ⬇️
US Net Liquidity ⬆️
As a result, BTC has rallied. However, price action and my momentum-based Macro (MSI)
1M
#Bitcoin
have been bought by the short-term holder (<155days) cohort since Jan (pink) - now 3.46m of total supply. Roughly half of that is ETFs. Now, we can see they are on pause.
Many of these buyers are in their first cycle and it will be fascinating to see their resolve,
I'm closely watching how
#AI
agents could significantly boost
#blockchain
valuations—a potential that's vastly underrated. This tipping point seems near, likely within 12-18 months, and possibly within 6 months, aligning with a global liquidity surge. With numerous AI
I lean on
@glassnode
's Active Entities metric in my Bitcoin fundamental model because of the strong statistical relationship w/ price. I have been on the lookout for a sustained break out of a 3yr range of network stagnation.
🧵on a key $BTC fundamental metric (+ some TA, Macro)
Seeing a sharp move higher on the Altseason indicator (alts outperforming BTC). Without a sustained
#Bitcoin
rally, which requires > ATH, this may be a short-lived phenomenon. But I suspect we are in the final throes of the bearish thrust.
#Bitcoin
now has global reserve asset status.
Some countries choose leadership and innovation, others are feckless and perpetual followers.
Pay attention Australia.
#auspol
While painful in the short term, the distributions of the Mt.Gox reserve and government sales remove the annoying supply overhang, helping distribute coins to a wider array of holders, thereby growing the network and leaving
#Bitcoin
even better off than before.
#Bitcoin
has reached an all-time high for the first time just before a Halving. The market has climbed the wall of worry and is entering the next phase, characterized by incessant media coverage and family members asking "is now a good time to buy?"
Its also when we typically
#bitcoin
technicals are still heavy with the trend indicator 📉 & 2/3 key macro/liquidity drivers in a bearish regime.
However, directionally, CB policy shifts are underway with BoJ intervention to save their shitcoin and the Fed cutting QT by 50%. These are significant but wont
Last week's violent sell-off was likely the
#crypto
mid-cycle pullback low; at least, that's what the 180-day low indicator suggests (bottom). l prefer to wait for a broader market breadth measure to confirm the market is out of the woods, though. The advance/decline line (ADL),
One of the few sure things in
#Australia
is that the exponential increase in the money supply and public debt will continue.
Australians coddle their property and equity portfolio statements more than their own children. However, while asset prices optically increase, when
I remember a time when saying out loud to senior TradFi folks that Blackrock were front loading their
#Bitcoin
ETF position, AI was set to become active on blockchain rails & $BTC mining was a strategic industry for nation states, were met with laughter.
What a wild 6 months.
#Ethereum
Fee Revenue (USD) has outpaced the $ETH price YTD, as economic activity expands independent of price speculation. This is the first time in 2yrs that Fees are outperforming Price, making 2023 look a lot like 2020.
@BBGIntelligence
For half a year, this asset's danced between $25k-$31k. More coins have changed hands in this tight range than anywhere else in its price distribution. This is also the longest period of compressed volatility in its history. The next phase in the breakdown of the fiat monetary
2009 is to Millennials what 1982 is to Boomers.
The great secular bull mkt in Equities started as boomers fully entered the workforce.
The great secular bull market in
#Bitcoin
(and blockchain assets in general) launched as Millennials entered the workforce at a time when
Despite a bounce in the past month, breath remains lousy across the broader
#crypto
complex.
🔹1M Returns: Top 200 -16% vs. Top 200 Equal Wgt -22%
🔹3M Returns: Top 200 -20% vs. Top 200 Equal Wgt -36%
🔹YTD Returns: Top 200 +25% vs. Top 200 Equal Wgt -18%
Let's take a deeper
I accept this may be premature given the state of the world geopolitically and the fact that technicals (price action) are still bearish. However, I suspect we are in the final throes of the big flush of the past months, which, for allocators, will make Q4 critical for 12-month
The central banks are capitulating, the liquidity spigots are opening, and
#Bitcoin
is about to go much higher.
My composite global liquidity momentum model (MSI), has provided the first Bullish regime signal since November 2023. Recall that Bitcoin rallied 75% from Nov to
#Blockchain
fundamental analysis is a new field, an open design space for the intellectually curious. But at its core are the long-standing, well-accepted principles of network theory, or Metcalfe's Law, which states the value of a network is proportional to the number of
@CryptoHayes
@mikemcglone11
@LukeGromen
Bottom Line: With every day of CB distortion, BTC, the network & asset becomes more valuable and validated. But for timing purposes, both the US liquidity and Global Money Supply indexes should provide the necessary clues for a tradable long term low for
#BTC
Q: When is the best time to allocate to Alts and which ones?
(Using the Smart Contract Platforms index as a proxy for Alts since this sector dominates the Top 100 index.)
A:
1. When the SCP sector is in an uptrend, and
2. The Altseason index is in an uptrend (green arrows).
Once energy grid executives are out professing the critical importance of Bitcoin mining you know we are entering the next phase of hyperbitcoinization. Amazing.
BREAKING: New working paper co-authored by former ERCOT & NYISO CEO, highlights
#Bitcoin
mining as a critical tool for clean energy and balancing the grid.
Risk assets love dollar weakness.
The $DXY holds the key to the
#bitcoin
cycle as it prices in mkt expectations on liquidity in real time. And liquidity is coming.
Watch the 101/102 level on $DXY If that breaks, then we should see ~$150k $btc this
#bitcoin
technicals are still heavy with the trend indicator 📉 & 2/3 key macro/liquidity drivers in a bearish regime.
However, directionally, CB policy shifts are underway with BoJ intervention to save their shitcoin and the Fed cutting QT by 50%. These are significant but wont
Historically,
#Bitcoin
doesn't like dollar strength. And the DXY has broken out of the wedge. I raised the macro risks a couple of weeks back
Gold is a proven geo-political hedge asset. Bitcoin has not proven itself yet - not until it decouples from the
#Bitcoin
is facing some macro headwinds, with several indicators in my macro state regime model turning negative in recent weeks. However, the longer term liquidity cycle remains extremely favorable for $BTC and
#crypto
in general.
Lets dive in 🧵
Do network fundamentals justify
#Solana
's 12mth 800% price performance? Based on Fee generation relative to its own history and vs. its peer networks, Yes.
Fee generation is up 9x since 2021 peak, while active users (DAUs) have tripled since September. DAUs are still 40% below
My first report for
@RealVision
has dropped. Its a deep dive on
#crypto
adoption and what that means for asset values.
One insight from the report:
Several key drivers are coalescing behind the re-acceleration of blockchain adoption as the technology steadily embeds itself
"If my predictions are even partially accurate, we could be looking at an exhilarating decade ahead."
In the 1st ever Pro Crypto report with
@Jamie1Coutts
, he dives deep into the network state, blockchain assets and future projections.
Read it here 👇
Watch Tradfi companies who bottom ticked one of the biggest financial market transformations of the past century, reverse course in 2024.
As Bitcoin eyes the throne as the next global reserve asset, pensions and fund managers clutching their "risk-free" US Treasuries are having
While
#Solana
's outperformance has waned in the past month, it is still the best-performing network in the past 12–18 months by a country mile. Do the fundamentals justify the outperformance, or is it just a result of market hype and speculation?
🧵on Solana's network health and
The pre-
#bitcoin
halving crunch is over for the miners. We are now in the post-halving chop phase - this may take a little while to resolve, aka $BTC retakes the ATH.
@realvision
subscribers have been asking about the best play.
In the last cycle, miners 6mths after the halving
In 2021 $ETH peaked at $4840, then the Merge in '22. In '23 Stakers realise a relatively stable nominal staking yield >5% (ex-MEV). This is also >5% in real terms, as the network's supply schedule is becoming deflationary. All during a bear market and an activity recession.
Govts owning
#Bitcoin
as a strategic reserve asset without a massive overhaul of the relationship between it and the citizens might pump our bags but solves little of what is destroying Western civilization today.
In my idealistic (rainbows and lollipops) view, a government,
🚨Presidential Candidate RFK JR: "I will sign an executive order directing the US Treasury to purchase 550 Bitcoin daily until the US has built a reserve of at least 4,000,000 Bitcoins and a position of dominance that no other country will be able to usurp."
For Ethereum to hit new all-time highs it may require active addresses to hit a million. Our Metcalfe Law-driven valuation framework helps identify the key variables that can support better forecasting of asset prices. 🧵
It gets worse.
Serious harm is... harm to "public confidence" in the banking system.
If you're not confident in the banking system, you are spreading misinfo.
Misinfo disinfo bill 2.0
#nomisdisbill
Observing that
#Bitcoin
's hashrate decline is slowing, which typically precedes a bottom and reversal of the bearish cross post-May halving.
However, this is predicated on a stabilization in the downtrend. The market is still digesting the supply overhang.
Notably, the %
The golden era for on-chain analysis is only just beginning.
Mr. Fink is hurtling towards the tokenization of everything, which means;
1) some of those small
#crypto
on-chain data analytics companies of today have immense upside
@artemis__xyz
@tokenterminal
@DuneAnalytics
Adding
#Bitcoin
to a portfolio could enhance performance, even in drawdown years. We ran simulations for a bare bones vanilla equity portfolio strategy, and found a 43% total excess return since 2013 with virtually no meaningful negative change in volatility measures.
🧵
Interesting observation from a pioneer OG
#crypto
analyst/investor
@cburniske
on the dApp pipeline. By my estimation, Daily active addresses should reach 20-30 million in 12 months time based on current growth rates. This implies 200-300 million MAUs and potentially 1 billion in
'Crypto apps' that hit next year will spin up users at a rate on par with ChatGPT -- users will onboard in the tens to hundreds of millions, en masse, quickly. We'll go from asking, "Where is the adoption?" to running around with our hair on fire with too much adoption.
@AlboMP
Basic logic fail. Nothing gets made here because of expensive energy, overtaxation, red tape & climate extremism. Creating more debt to fund your boondoggles weakens our nation while enriching your special interests.
Bear market/Bull market, adoption of
#blockchain
technology continues unabated. Not having exposure to one of the largest structural trends of the next decade could be costly.
5 million daily
#crypto
users today, is likely to be 100m in less than 5 years.
🧵
The 10-year seasonality performance for
#Bitcoin
& the PBoC balance sheet.
While September is typically a poor month for $BTC, it is also when the Chinese CB tends to add liquidity to the system. Historically, this ends around January.
Timeseries chart:
Meanwhile, the Chinese are back at it.
Going back to 2016, these injections by the PBoC has seen
#Bitcoin
appreciate by at least 100% in the following months.
(h/t
@BittelJulien
)