Bitcoin Magazine Pro reviewed Bitcoin in October and discussed some key topics. This includes the decline in Bitcoin exchange balances, over $5 billion in ETF inflows, and optimistic forecasts that could redefine Bitcoin's value in the coming quarter. The following are the details of the report.
Key Highlights:
· On-chain analysis: Bitcoin exchange balances are at historic lows, indicating growing confidence among holders and an increasing preference for self-custody.
· Surge in Bitcoin ETFs: ETF inflows exceeded $5.4 billion in October, with BlackRock's IBIT leading the market. This reflects the growing acceptance of Bitcoin in the mainstream financial markets.
· Mining dynamics: Russia and China are expanding their mining influence, while the US maintains the largest share of hashrate.
· Bullish price forecast: Bitcoin analyst Tone Vays predicts that by mid-2025, with strong technical indicators, Bitcoin's potential price range could be $102,000 to $140,000.
On-chain
Highlights
· BTC exchange balances hit new lows, indicating a rise in self-custody preference
· Addresses with over 100 BTC reach an all-time high, reflecting an expansion in adoption
· Strong on-chain fundamentals suggest the price momentum will continue until 2025.
Forecast
The decline in Bitcoin exchange balances and the growing wallet adoption rate signal the potential for price appreciation, and investors should monitor exchange inflows and the growth of high-balance wallets as indicators of Q4 and future demand and potential price strength.
Insights
The total Bitcoin balance on exchanges declined significantly in October, currently slightly below 3 million, as shown in Figure 1. This decline indicates that investors are increasingly choosing self-custody over leaving their funds on exchanges, a trend typically associated with long-term holding strategies. When exchange balances decrease while prices rise, it suggests confidence in Bitcoin's medium to long-term outlook. This shift towards self-custody could become a constraint on the supply side, and with sustained demand, it may exert upward pressure on prices.
Mining
Highlights
· Russia and China currently contribute significantly to the global Bitcoin hashrate.
· The US remains the leader in hashrate, but Russia is now the second-largest contributor, while China's mining activities are quietly increasing despite the ban.
· Emerging markets like Ethiopia and Argentina are also seeing growth, which may impact the hashrate distribution.
Forecast
If China and Russia's hashrate continues to grow, US miners may face new global competition next year.
Insights
Recently, Russia and China have become key forces in the global Bitcoin mining landscape. Russia is now the second-largest contributor to the global hashrate. It is leveraging its abundant natural resources to enable miners to access cost-effective energy. This expansion is driven by the region's support for mining as a strategically profitable economic activity. Meanwhile, despite the official ban, underground mining in China continues, with China's underground mining activities increasing in recent years. This dual development suggests a shift in mining power, which may impact market dynamics, especially as the global hashrate distribution is no longer dominated by the US.
While the US remains the leader in Bitcoin hashrate, the rapid rise of Russia and the resilience of China pose challenges to US miners, and the increasing mining activities in emerging markets like Ethiopia and Argentina are creating a more decentralized global mining network. This diversification may enhance the security and operational stability of the Bitcoin network, making it less susceptible to regional disruptions. As these trends continue, US Bitcoin miners may face more intense competition, whether in securing energy resources or maintaining profitability under volatile market conditions.
ETFs
Highlights
· BlackRock's BTC ETF (IBIT) had a single-day record inflow of $872 million, with a monthly net trading volume of $4.6 billion.
· Fidelity's single-day record inflow was $239 million, but its monthly net trading volume of $496.8 million pales in comparison to IBIT.
· Bitwise (BITB) had a single-day record inflow of $100.2 million, with a monthly net trading volume of $137.3 million.
Forecast
In the short term, BTC ETFs are expected to experience volatility. While IBIT remains the leader in trading volume and liquidity, it may not provide the best trading volatility. The relative sizes of FBTC and ARKB have seen significant fluctuations, offering the best trading opportunities.
Insights
The net inflows into Bitcoin ETFs reached a record of around $5.415 billion in October (Figure 1). The popularity and demand for these products have prompted the US SEC to further approve the ability to trade options on many BTC ETF products. Increased speculation, leverage, margin calls, market maker delta hedging, and sentiment effects may impact BTC ETFs, which will have a ripple effect on the underlying Bitcoin spot market itself.
BlackRock's IBIT is the clear leader, with a monthly trading volume of $4.6 billion, being the most actively traded. For traders looking to act on market dynamics, this means that for every trade in IBIT, there will be a willing counterparty. Other ETF options, such as Fidelity's FBTC, Ark 21Shares' ARKB, and Bitwise's BITB, can provide better entry opportunities, as the trading volume for each option is lower (Figure 2). While ETFs aim to track the BTC market price perfectly, the lower liquidity and trading volume can create opportunities to enter favorable positions during these imbalances.
Stocks
Highlights
· MicroStrategy (MSTR) announced a $42 billion, 3-year Bitcoin investment plan to put more BTC on its balance sheet.
· Despite Bitcoin's 63.9% YTD gain, six out of the top ten Bitcoin-related stocks have underperformed (negative returns).
· Metaplanet INC (TYO: 3350) is up 838.82% YTD, mainly due to its announcement of a Bitcoin balance sheet strategy.
Forecast
Driven by the positive sentiment around Bitcoin in early Q4, Bitcoin-related stocks may see an upswing in the coming months. Stocks like Semler Scientific (SMLR) that are quietly adding Bitcoin to their balance sheets may present opportunities, providing a positive upward momentum for the stock's valuation.
Insights
While intuitively, Bitcoin-related stocks should follow the bullish trend in BTC, most have not benefited from Bitcoin's 63.9% YTD gain (Figure 1). Marathon Digital (MARA), Riot Platforms (RIOT), and CleanSpark (CLSK) are down -31.42%, -38.98%, and -6.39% YTD, respectively, indicating operational challenges or sensitivity to crypto mining costs. Tesla (TSLA) has only gained 0.2% since the start of 2024. Block Inc. (SQ) is down 6.72%. While Coinbase (COIN) and Galaxy Digital Holdings (GLXY or BRPHE) have performed positively, their performance has not exceeded the spot BTC price movement.
Here is the English translation of the text, with the specified terms retained and not translated: Compared to this, MicroStrategy (MSTR) surged 263.68%, reflecting the impact of its leveraged Bit holdings and investor confidence in its Bit-centric strategy. MicroStrategy Executive Chairman Michael Saylor announced a 42 billion USD Bit investment plan over three years, continuing the company's buy-and-hold strategy (Figure 2). In Japan, Metaplanet inc. (TYO: 3350) has grown 838.82% so far this year since announcing its Bit reserve strategy earlier this year. As Bit is on the cusp of a new bull market, companies should consider adopting a Bit holding strategy. Derivatives Highlights · Bit recently broke through $70,000, with over $100 million in short positions liquidated. · Funding rates remain relatively neutral, possibly due to uncertainty around the US election. · At this stage of the market cycle, funding rates are very low. · This is bullish, as it will allow the BTC price to rise further without accumulating too much leverage in the derivatives market. Forecast Once the uncertainty around the US election and the subsequent market volatility passes, Bit is expected to rise before the end of the year. Insights Over the past month, BTC has been on an upward trend. While there have been downward corrections along the way, most of the liquidations have been against traders attempting to short BTC. The US election has brought short-term uncertainty to the Bit derivatives market. Significant volatility is expected in the market in the coming weeks. However, once any knee-jerk reactions in either direction subside, the derivatives market is expected to stabilize again. Currently, at this stage of the Bit market cycle, funding rates remain very low. This is bullish and should allow the Bit price to rise significantly in the coming months, until funding rates reach +0.06. At that point, caution may be warranted, but we are still far from those levels. Adoption Highlights · MicroStrategy (MSTR) announced a $42 billion capital plan, including a $21 billion ATM stock offering to purchase Bit. · Metaplanet (3350.T) holds over 1,000 BTC, making it the largest publicly traded Bit holder in Asia. · Microsoft (MSFT) will hold a shareholder meeting in December and vote on a potential Bit financial strategy. Forecast MicroStrategy's (MSTR) decision to use Bit as a financial reserve benefits shareholders and drives Bit adoption among publicly traded institutions. Since January, companies like Metaplanet (the largest public Bit holder in Asia with over 1,000 BTC), Semler Scientific, and Samara Asset Group have followed suit. This trend may influence Microsoft (MSFT) shareholders to vote on a similar strategy in December. Insights MicroStrategy plans to issue $21 billion in Class A common stock over the next three years to purchase Bit, with Michael Saylor's $42 billion capital plan including a $21 billion stock offering and aiming to raise $21 billion in fixed-income securities to fund Bit purchases. Inspired by MicroStrategy's success, Japan's Metaplanet also adopted a Bit reserve strategy in the spring, currently holding over 1,000 BTC, making it the largest publicly traded Bit holder in Asia. Due to Bit's deflationary nature and 40% average annual returns, it has become the preferred reserve asset to hedge excess cash, with even large tech companies starting to follow suit: Microsoft shareholders will vote in December on whether to adopt Bit as a reserve asset. While management has stated "no", strong shareholder interest may change the decision, potentially triggering a wider adoption of Bit by publicly traded companies. Regulation Highlights · SEC approves Bit ETF options: an important step towards mainstream financial product integration. · Pennsylvania's Bit rights bill: a milestone in protecting self-custody and payment rights for Bit. · Thailand proposes crypto fund access: could boost crypto adoption in Asia. Forecast Recent regulatory developments, particularly the approval of Bit ETF options and the proactive legislative movement in the US, could significantly boost investor confidence. This could lead to a surge in the Bit price, especially if these measures are seen as paving the way for further mainstream financial integration. Additionally, regulatory dynamics in key markets like the US should be monitored, as political changes in the US may impact the regulatory approach, while countries like Asia are opening up to crypto funds, which could affect regional and global market sentiment. Insights October was a pivotal moment for the Bit regulatory landscape, with the SEC's approval of Bit ETF options trading demonstrating increasing traditional finance acceptance of cryptocurrencies. This development not only provides investors with additional hedging and speculative tools, but also has the potential to improve Bit's liquidity and price stability in the long run. Pennsylvania's recent legislation recognizing Bit self-custody and payment rights may influence other US states. This could create a more Bit-friendly environment, reducing concerns about strict regulation and fostering an investment-friendly atmosphere. In Asian markets, particularly Thailand's move to allow private funds to invest in cryptocurrencies, suggests widespread acceptance of cryptocurrencies in one of the world's largest economic regions, potentially driving trends in neighboring countries. Macro Outlook Highlights The continuously rising US federal debt highlights the limitations of fiat currencies, driving interest in Bit. Persistent inflation shown by the CPI enhances the appeal of Bit as a hedge. Amid concerns over the long-term stability of the US dollar, institutional investors are increasingly considering Bit. Forecast Bit is expected to continue its upward trend, driven by growing concerns over federal debt and inflation. Monitoring CPI and federal debt levels can provide early indicators for Bit's potential appreciation in the coming months. Insights In a high-debt, inflationary market environment, Bit's value proposition is clearer than ever before. The first chart below shows the relationship between federal debt and Bit price. As federal debt has risen to unprecedented levels, the sustainability of the US dollar as a store of value is increasingly questioned. Investors, particularly institutional investors, are seeking alternatives that are not subject to currency devaluation. Bit's limited supply can effectively hedge the risks of excessive debt accumulation and currency depreciation. The second chart below shows the persistent rise in the Consumer Price Index (CPI) relative to Bit, even when excluding more volatile categories like food and energy. This reinforces Bit's position as a long-term store of value that can preserve purchasing power during periods of economic uncertainty. With no signs of inflation abating and federal debt continuously expanding, Bit stands out as a unique strategic asset for preserving value and hedging economic instability. Price Forecast Highlights · The price trend is about to close at all-time highs on the daily, weekly, and monthly charts, which is extremely bullish across all these time frames.· In the history of Bitcoin, MRl has closed with a green asterisk only 7 times in a 2-month candlestick chart. All six previous times led to a gain of over 100% in the following year.
· The cup and handle pattern and Fibonacci extension provide additional bullish price targets in the range of $100,000 to $105,000.
Forecast
The biggest concern currently is "group thinking", with everyone expecting the price to exceed $100,000. Personally, I don't see any concerning signs in the TA charts, on-chain analysis, four-year halving cycle analysis, mining industry, or any regulatory setbacks. Many are buying Bitcoin, expecting it to gain greater regulatory recognition under the Trump administration.
Insights
Bitcoin is well-positioned for a potential bull market, with technical indicators pointing to three price targets. The Tone Vays MRl indicator on the 2-month chart shows that the gains over the past 6 months have been at least 100%, indicating a peak of around $140,000 or higher by the second quarter of 2025. This pattern is consistent with the significant rebounds in 2017 and 2021.
Additionally, the cup and handle patterns on the weekly and monthly charts point to a target of $105,000, which is typically achieved within 4-6 months based on historical trends. Finally, the Fibonacci extension shows an initial target of $102,000, and if the previous cycles are repeated, higher levels of $155,000 and $210,000 may be reached.
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