Original Author: Bitcoin Magazine Pro
Compiled by: Felix, PANews
Bitcoin Magazine Pro's article reviewed BTC in October and discussed some key topics. This includes the decline in BTC exchange balances, over $5 billion in ETF inflows, and optimistic forecasts that could redefine BTC's value in the coming quarter. The details of the report are as follows.
Key Highlights:
On-Chain BTC Analysis: BTC exchange balances are at historic lows, indicating growing holder confidence and a preference for self-custody.
Surge in BTC ETFs: ETF inflows exceeded $5.4 billion in October, with BlackRock's IBIT leading the market. This reflects increasing mainstream financial market acceptance of BTC.
Mining Dynamics: Russia and China are expanding their mining influence, while the US maintains the largest share of hashrate.
Bullish Price Forecast: BTC analyst Tone Vays predicts a potential price range of $102,000 to $140,000 by mid-2025, supported by strong technical indicators.
On-Chain BTC
Highlights
BTC exchange balances hit new lows, indicating a rise in self-custody preference
Addresses holding over 100 BTC reach a new all-time high, reflecting expanded adoption
Robust on-chain fundamentals suggest price momentum will continue through 2025.
Forecast
The decline in BTC exchange balances and growing wallet adoption point to upside price potential, and investors should monitor exchange inflows and growth in high-balance wallets as indicators of Q4 and beyond demand and potential price strength.
Insights
BTC's total exchange balances declined significantly in October, currently slightly below 3 million, as shown in Figure 1. This decrease indicates that investors are increasingly choosing self-custody over leaving funds on exchanges, a trend typically associated with long-term holding strategies. When exchange balances decrease while prices rise, it suggests confidence in BTC's medium to long-term outlook. This shift towards self-custody could become a supply-side constraint, and with persistent demand, could exert upward pressure on prices.
Mining
Highlights
Russia and China currently contribute significantly to the global BTC hashrate.
The US remains the leader in hashrate, but Russia is now second, and China's mining activity is quietly increasing despite the ban.
Emerging markets like Ethiopia and Argentina are also seeing growth, potentially impacting hashrate distribution.
Forecast
If China and Russia's hashrate continues to grow, US miners may face new global competition next year.
Insights
Russia and China have recently become key forces in the global BTC 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 could impact market dynamics, especially as the global hashrate distribution is no longer dominated by the US.
While the US remains the leader in BTC hashrate, Russia's rapid rise and China's resilience pose challenges to US miners, and emerging markets like Ethiopia and Argentina are also ramping up mining activities, creating a more decentralized global mining network. This diversification may enhance the BTC network's security and operational stability, making it less susceptible to regional disruptions. As these trends continue, US BTC 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's (BITB) single-day record inflow was $100.2 million, with a monthly net trading volume of $137.3 million.
Forecast
BTC ETFs are expected to see volatility in the near term. While IBIT remains the leader in trading volume and liquidity, it may not offer the best trading volatility. The relative sizes of FBTC and ARKB have seen significant fluctuations, providing the best trading opportunities.
Insights
BTC ETF net inflows 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 options trading on many BTC ETF products. Increased speculation, leverage, margin calls, market maker delta hedging, and sentiment effects may impact BTC ETFs, which could have a ripple effect on the underlying BTC spot market itself.
BlackRock's IBIT is the clear leader, with a monthly trading volume of $4.6 billion, making it the most active. For traders looking to act on market dynamics, this means that for every trade, there will be a willing counterparty if it's IBIT. Other ETF options, such as Fidelity's FBTC, Ark 21 Shares' ARKB, and Bitwise's BITB, can provide better entry opportunities, as each option has lower trading volumes (Figure 2). While ETFs aim to track the BTC market price perfectly, the lower liquidity and trading volumes can create opportunities to enter favorable positions during these imbalances.
Equities
Highlights
MicroStrategy (MSTR) announced a 3-year, $42 billion BTC investment plan to further increase BTC on its balance sheet.
Despite BTC's 63.9% YTD gain, six out of the top ten BTC-related stocks have underperformed (negative returns).
Metaplanet INC (TYO: 3350) is up 838.82% YTD, primarily due to its announcement of a BTC balance sheet strategy.
Forecast
Driven by the positive sentiment around BTC in early Q4, BTC-related stocks may see an uptick in the coming months. Stocks like Semler Scientific (SMLR) that are quietly adding BTC to their balance sheets may present opportunities, providing positive upside momentum for the stock's value.
Insights
Although intuitively, BTC-related stocks would be expected to follow the bullish trend of BTC, most have not benefited from the 63.9% YTD increase in BTC (Figure 1). Marathon Digital (MARA), Riot Platforms (RIOT) and CleanSpark (CLSK) have declined -31.42%, -38.98% and -6.39% YTD respectively, indicating operational difficulties or sensitivity to crypto mining costs, while Tesla (TSLA) has only risen 0.2% since the start of 2024 and Block inc. (SQ) has fallen 6.72%. While Coinbase (COIN) and Galaxy Digital Holdings (GLXY or BRPHE) have performed positively, their performance has not exceeded the spot BTC price trend.
In contrast, MicroStrategy (MSTR) has soared 263.68%, reflecting the impact of its leveraged BTC holdings and investor confidence in its BTC-centric strategy. MicroStrategy Executive Chairman Michael Saylor announced a $42 billion, 3-year BTC investment plan, continuing the company's buy-and-hold strategy (Figure 2). In Japan, Metaplanet inc. (TYO: 3350) has grown 838.82% YTD since announcing its BTC reserve strategy earlier this year. As BTC enters the next bull market, companies should consider adopting a BTC holding strategy.
Derivatives
Highlights
BTC recently broke above $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 BTC price to rise further without accumulating too much leverage in the derivatives market.
Forecast
Once the uncertainty around the US election and subsequent market volatility passes, BTC is expected to rise further before the end of the year.
Insights
BTC has been in an uptrend over the past month. 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 introduced short-term uncertainty into the BTC 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 BTC market cycle, funding rates remain very low. This is bullish and should allow BTC 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 $4.2 billion capital plan, including a $2.1 billion ATM stock offering to purchase BTC.
Metaplanet (3350.T) holds over 1,000 BTC, making it the largest publicly traded BTC holder in Asia.
Microsoft (MSFT) will hold a shareholder meeting in December and vote on a potential BTC treasury strategy.
Forecast
MicroStrategy's (MSTR) decision to use BTC as a treasury reserve is beneficial for shareholders and is driving BTC adoption among publicly traded institutions. Since January, companies like Metaplanet (the largest public BTC 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 $2.1 billion in Class A common stock over the next three years to purchase BTC, with Michael Saylor's $4.2 billion capital plan including $2.1 billion in stock issuance and aiming to raise $2.1 billion in fixed income securities to fund BTC purchases.
Inspired by MicroStrategy's success, Japan's Metaplanet also adopted a BTC treasury strategy earlier this year and now holds over 1,000 BTC, making it the largest publicly traded BTC holder in Asia. Due to BTC'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 BTC as a treasury asset. While management has stated "no", strong shareholder interest may change the decision, potentially triggering a wider adoption of BTC among publicly traded companies.
Regulation
Highlights
SEC approval of BTC ETF options: an important step towards mainstream financial product integration.
Pennsylvania's Bitcoin Bill of Rights: a milestone in protecting self-custody and payment rights for BTC.
Thailand proposes crypto fund access: could boost crypto adoption in Asia.
Forecast
Recent regulatory developments, particularly the approval of BTC ETF options and the positive legislative momentum in the US, could significantly boost investor confidence. This could lead to a surge in BTC 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, where political changes may influence the regulatory approach, and the opening of crypto funds in regions like Asia, could impact regional and global market sentiment.
Insights
October has been a pivotal moment for the BTC regulatory landscape, with the SEC's approval of BTC ETF options trading demonstrating increasing traditional finance acceptance of cryptocurrencies. This development not only provides investors with additional hedging and speculative tools, but may also improve BTC's liquidity and price stability in the long run.
Pennsylvania's recent legislation recognizing self-custody and payment rights for BTC may influence other US states. This could create a more BTC-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 rising US federal debt highlights the limitations of fiat currencies, driving interest in BTC.
Persistent inflation as shown by the CPI enhances the appeal of BTC as a hedge. Amid concerns over the long-term stability of the US dollar, institutional investors are increasingly considering BTC.
Forecast
BTC is expected to continue its upward trend, driven by growing concerns over federal debt and inflation. Monitoring the CPI and federal debt levels can provide early indicators for BTC's potential appreciation in the coming months.
Insights
In a high-debt, inflationary market environment, the value proposition of BTC has never been clearer. The first chart below shows the relationship between federal debt and BTC price. As federal debt has risen to unprecedented levels, the sustainability of the US dollar as a store of value is increasingly being questioned. Investors, particularly institutional ones, are seeking alternatives that are not subject to currency devaluation. BTC's limited supply can effectively hedge the risks of excessive debt accumulation and currency devaluation.
The second chart below shows the persistent rise in the Consumer Price Index (CPI) relative to BTC, even excluding more volatile categories such as food and energy, inflation remains high. This consolidates BTC's position as a long-term store of value that can maintain purchasing power during periods of economic uncertainty. With no signs of inflation abating and federal debt continuing to balloon, BTC has a unique position as a strategic asset for preserving value and hedging economic instability.
Price Forecast
Highlights
Price action is poised to close at all-time highs on the daily, weekly, and monthly charts, which is extremely bullish across all these timeframes.
In BTC's history, the MRI has only closed green with a star 7 times on a 2-month candle. All six previous instances led to gains of over 100% in the following year.
Cup and handle patterns and Fibonacci extensions provide additional bullish price targets in the $100,000 to $105,000 range.
Predictions
The biggest concern currently is "group think" with everyone expecting prices to exceed $100,000. Personally, I don't see anything concerning in TA charts, on-chain analysis, the four-year halving cycle, the mining industry, or any regulatory setbacks. Many are buying BTC in anticipation of greater regulatory acceptance under the Trump administration.
Insights
BTC is primed for a potential bull market, with technical indicators pointing to three price targets. The Tone Vays MRI indicator on the 2-month chart shows gains of at least 100% over the past 6 months, implying a peak of around $140,000 or higher by Q2 2025. This pattern is consistent with the large rebounds in 2017 and 2021.
Additionally, 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, Fibonacci extensions indicate an initial target of $102,000, with the potential to reach higher levels of $155,000 and $210,000 if previous cycles repeat.
