In the past 24 hours, BTC has been on a unilateral upward trend, with the price of BTC rising continuously from $62,000 to $64,500. BTC spot ETF has seen net inflows for the seventh consecutive trading day, with a net inflow of $300 million yesterday, becoming the main driving force for BTC's rise.
The SEC requires ETF issuers to submit the final S-1 filing before this Wednesday, which means the SEC will announce the approval results next Monday and the relevant ETFs may go online next Tuesday.
The most influential KOLs in technology, finance, and politics support BTC, and market sentiment has turned optimistic.
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The general rise in the market was broken by a piece of news - the currency in Mentougou moved. After two rounds of transfer of nearly 6 billion BTC, the market also fell. Bitcoin fell to 63,000 and Ethereum fell to 3,350 and now recovered to 3,400.
At present, the coins have only been transferred and have not been shipped, so this small drop is also the result of panic fleeing, otherwise it would not have fallen so much. Then the question is, if Mentougou starts to pay full compensation, will it be more severe than the Dezi shipment? Will the approval of the Ethereum ETF absorb the negative impact brought by Mentougou? Will Bitcoin fall to 55,000 again?
A few days ago, I wrote an article titled " Dezi's Bitcoin has been sold out, is Mentougou next? Analyze the impact on the market " which compares the Bitcoin ETF inflow when Dezi sold the coins and the future cycle of Mentougou's coin sales and ETF inflows. Friends who are interested can read it.
Selling pressure analysis
Mentougou creditors will sell some of their BTC, but probably not all of them.
From the perspective of profitability, according to cost calculation, when Mentougou went bankrupt, the BTC price was $485. If it is the original creditor, according to the current price, the BTC has increased by 120 times; the amount of BTC paid by Mentougou is about 20% of the original holdings, so the profit is about 24 times. Even if it is a debt acquisition, there is more than 10 times the profit. In addition, the debt acquisition agency may hold more BTC, and it is optimistic about BTC in the long term and will not sell all of it.
From the perspective of holders, during the long litigation process, the widespread debt trading market has given paper creditors ample opportunities to exit. Those who are willing to buy debts should be more likely to be long-term BTC holders.
Assuming that 75% of the people accept early lump-sum repayment, the total number of BTC repaid is 105,750, with a discount of 11%, and the actual number of BTC used for repayment is 94,117. Assuming a selling ratio of 30%, 50%, and 70%, and a selling time of 1 to 3 months, the number of BTC sold under different circumstances can be calculated.
If the compensation from Mentougou is sold out within a month, the selling pressure faced by the market will be similar to that of the German government, with the amount and time of selling being similar. According to the current demand for ETFs, it cannot provide sufficient support, and the price of BTC may fall further.
If the compensation of Mentougou lasts longer (2-3 months), the amount of BTC entering the market every day will not be particularly large, and it will not cause a one-time drop. However, due to the continued expectation of selling pressure, there may be a period of shocks to digest the selling pressure.
At present, the actual selling pressure of Mentougou has not yet entered the market. When the BTC held by Mentougou is distributed to several exchange addresses on a large scale, it may cause a large panic drop, thus forming a sharp drop. When specific individuals sell, due to dispersion and difficulty in tracking and observation, it may not necessarily cause a significant drop in prices.
Can Ethereum ETF bring capital to support the market?
The net inflow of the US spot Ethereum ETF may be only 30%-35% of the spot Bitcoin ETF, and the distribution of funds tends to be downward.
At this level, net inflows in the first six months ranged from $4.7 billion to $5.4 billion. In addition, the inflows and the beta of Ethereum's return relative to inflows may be lower than the analysis suggests.
One reason is that while ETH may offer diversification benefits in the long term, this is not currently the case given its different and broader use cases. Investors who might buy spot ETFs (rather than the respective tokens) may consider Bitcoin and Ethereum similar enough to allocate their allocations to both cryptocurrencies rather than viewing them as different assets. This means that Ethereum may see inflows specifically for Bitcoin ETFs rather than additional allocations.
Compared with the 9 billion selling pressure in Mentougou, it is far from enough, but if the inflow of Bitcoin ETF is added, it will be almost the same. If the coins in Mentougou are sold for a long time, the impact on the market will be smaller and smaller, plus the interest rate cut in September and the subsequent election. If Mentougou is smashed, it will directly hit a big waterfall. At this time, we should be happy because we can buy cheaper chips and pick up cheaper goods. A very straightforward example, when Dezi was selling coins, the cottage fell again and again. If you didn't enter the warehouse at that time, now basically it has risen by 20%-30%. Will you chase the rise again?
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I plan to accept four more one-on-one classes at the end, but I won’t accept any more. To be honest, I can’t handle too many. After all, my energy is limited.
Currently, there are basically no good opportunities for retail investors to get on board BTC. The focus is to lay out high-quality copycats in the later stage and strive to achieve an overall return of no less than 10 times this year.
