Author: Bitcoin Magazine Pro
Compiled by: Felix, PANews
Bitcoin Magazine Pro published a review of Bitcoin in October, discussing several key topics. These include the decline in Bitcoin exchange balances, ETF inflows exceeding $5 billion, and optimistic predictions that could redefine Bitcoin's value in the coming quarter. Below are the report details.
Key Highlights:
Bitcoin on-chain analysis: Bitcoin exchange balances are at historical lows, indicating increasing holder confidence as more choose self-custody.
Bitcoin ETF Surge: October ETF inflows exceeded $5.4 billion, with BlackRock's IBIT leading the market. This reflects the increasing acceptance of Bitcoin in mainstream financial markets.
Mining Dynamics: Russia and China are expanding their mining influence, while the U.S. still holds the largest share of hash power.
Bullish Price Prediction: Bitcoin analyst Tone Vays predicts a potential price range of $102,000 to $140,000 by mid-2025, supported by strong technical indicators.
Bitcoin On-chain
Highlights
BTC exchange balances hit a record low, indicating a rise in self-custody preferences.
Addresses with over 100 BTC reached an all-time high, reflecting an expansion in adoption.
Strong on-chain fundamentals indicate that price momentum will continue into 2025.
Prediction
The decrease in Bitcoin exchange balances and the continuous growth in wallet adoption suggest potential for price increases. Investors should monitor exchange inflows and the growth of high-balance wallets as indicators of demand and potential price strength for Q4 and beyond.
Insights
In October, Bitcoin's total balance on exchanges significantly decreased, currently slightly below 3 million, as shown in Chart 1. This decline suggests that investors are increasingly opting for self-custody rather than leaving funds on exchanges, a trend typically associated with long-term holding strategies. When exchange balances decrease while prices rise, it indicates confidence in Bitcoin's mid- to long-term outlook. This shift toward self-custody may become a supply constraint, potentially putting upward pressure on prices if demand remains strong.
Mining
Highlights
Russia and China currently contribute significantly to global Bitcoin hash power.
The U.S. remains a leader in hash power, but Russia ranks second, and China, despite its mining ban, is quietly increasing activity.
Emerging markets like Ethiopia and Argentina are also experiencing growth, which may impact hash power distribution.
Prediction
If China's and Russia's hash power continues to grow, U.S. miners may face new global competition next year.
Insights
Recently, Russia and China have become key players in the global Bitcoin mining space. Russia is now the second-largest contributor to global hash power, leveraging its abundant natural resources to provide miners with cost-effective energy. This expansion is driven by regional support for mining as a profitable strategic economic activity. Meanwhile, despite an official ban from the Chinese government, underground mining continues to thrive, with increased activity in recent years. This dual development suggests a shift in mining power, which could impact market dynamics, especially as global hash power distribution is no longer dominated by the U.S.
While the U.S. remains a leader in Bitcoin mining power, the rapid rise of Russia and the resilience of China pose challenges to U.S. miners. Emerging markets like Ethiopia and Argentina are also ramping up mining activities, 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. With these trends continuing, U.S. Bitcoin miners may face stiffer competition, both in securing energy resources and in maintaining profitability amid volatile market conditions.
ETFs
Highlights
BlackRock's BTC ETF (IBIT) had a maximum single-day inflow of $872 million, with a net trading volume of $4.6 billion for the month.
Fidelity's maximum single-day inflow was $239 million, but the net trading volume was only $496.8 million, which pales in comparison to IBIT.
Bitwise (BITB) had a maximum single-day inflow of $100.2 million, with a net trading volume reaching $137.3 million for the month.
Prediction
In the short term, BTC ETFs are expected to experience volatility. While IBIT remains a leader in volume and liquidity, it may not offer the best trading volatility. The relative scale of FBTC and ARKB has shown significant fluctuations, providing optimal trading opportunities.
Insights
In October, Bitcoin ETF net inflows reached a record approximately $5.415 billion (Chart 1). The popularity and demand for these products have prompted the U.S. SEC to further approve options trading on many BTC ETF products. Increases in speculation, leverage, margin calls, market maker delta hedging, and sentiment effects may influence BTC ETFs, which will have a continuing effect on the direct Bitcoin spot market itself.
BlackRock's IBIT is far ahead, with a monthly trading volume of $4.6 billion and the most active trading. For traders looking to act based on market dynamics, this also means that for every trade, if it's IBIT, there will be someone willing to take it. Other ETF options, such as Fidelity's FBTC, Ark 21Shares' ARKB, and Bitwise's BITB, can provide better entry opportunities, as the trading volumes for each option have decreased (Chart 2). While ETFs strive to perfectly track BTC market prices, lower liquidity and trading volumes can create opportunities to enter favorable positions during these imbalances.
Stocks
Highlights
MicroStrategy (MSTR) announced a three-year, $42 billion Bitcoin investment plan aimed at increasing BTC on its balance sheet.
Despite Bitcoin's 63.9% increase year-to-date, six of the top ten Bitcoin-related stocks have underperformed (negative returns).
Metaplanet INC (TYO: 3350) has risen 838.82% year-to-date, primarily due to its announcement of adopting a Bitcoin balance sheet strategy.
Prediction
Driven by positive sentiment surrounding Bitcoin in early Q4, Bitcoin-related stocks may rise in the coming months. Stocks like Semler Scientific (SMLR) may present opportunities, as they quietly incorporate Bitcoin into their balance sheets, providing positive upward momentum for the stock's value.
Insights
Although intuitively, Bitcoin-related stocks should follow BTC's bullish trend, most have not benefited from Bitcoin's year-to-date (YTD) increase of 63.9%. Marathon Digital (MARA), Riot Platforms (Riot), and CleanSpark (CLSK) are down -31.42%, -38.98%, and -6.39% YTD, respectively, indicating operational difficulties or sensitivity to cryptocurrency mining costs. Tesla (TSLA) has only increased 0.2% since early 2024, while Block Inc. (SQ) is down 6.72%. Although Coinbase (COIN) and Galaxy Digital Holdings (GLXY or BRPH) have performed positively, their performance has not exceeded the spot Bitcoin price trends.
In contrast, MicroStrategy (MSTR) surged 263.68%, reflecting the impact of its leveraged Bitcoin holdings and investors' confidence in its Bitcoin-focused strategy. MicroStrategy's Executive Chairman Michael Saylor announced a $42 billion Bitcoin investment plan, continuing the company's purchase and hold strategy (Chart 2). In Japan, Metaplanet Inc. (TYO: 3350) has grown 838.82% year-to-date since announcing its Bitcoin reserve strategy earlier this year. With Bitcoin positioned for the next bull market, companies should consider adopting Bitcoin holding strategies.
Derivatives
Highlights
Bitcoin recently broke through $70,000, with short positions liquidated exceeding $100 million.
Funding rates remain relatively neutral, potentially due to the uncertainty surrounding the U.S. elections.
At this stage of the market cycle, funding rates are very low. This is bullish, as it will allow BTC prices to rise further without accumulating excessive leverage in the derivatives market.
Prediction
Once the uncertainty surrounding the U.S. elections and subsequent market volatility pass, Bitcoin is expected to rise before the end of the year.
Insights
Bitcoin has been on an upward trend over the past month. Although there have been downward corrections along the way, most liquidations have targeted traders attempting to short BTC.
The U.S. elections bring short-term uncertainty to the Bitcoin derivatives market. Significant market volatility is expected in the coming weeks.
However, once any directional impulse reactions fade, the derivatives market is expected to stabilize again. Currently, at this stage of the Bitcoin market cycle, funding rates remain very low. This is bullish and should allow Bitcoin prices to rise significantly in the coming months until funding rates reach +0.06. At that point, caution may become necessary, but we are far from those levels currently.
Adoption
Highlights
MicroStrategy (MSTR) announced a $42 billion capital plan, including a $21 billion ATM stock issuance to purchase Bitcoin.
Metaplanet (3350.T) holds over 1,000 BTC, making it the largest publicly traded Bitcoin holder in Asia.
Microsoft (MSFT) will hold a shareholder meeting in December to vote on potential Bitcoin financial strategies.
Prediction
MicroStrategy (MSTR) has decided to use Bitcoin as a financial reserve, benefiting shareholders and driving adoption of Bitcoin in publicly traded companies. Since January, companies such as Metaplanet (the largest public holder of Bitcoin in Asia, holding over 1,000 BTC), Semler Scientific, and Samara Asset Group have followed suit. This trend may impact Microsoft (MSFT) shareholders voting 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 Bitcoin. Michael Saylor's $42 billion capital plan includes a $21 billion stock issuance aimed at raising $21 billion in fixed-income securities to fund the purchase of Bitcoin.
Inspired by MicroStrategy's success, Japan's Metaplanet also adopted a Bitcoin reserve strategy this spring, now holding over 1,000 BTC, making it the largest publicly traded Bitcoin holder in Asia. Given Bitcoin's deflationary nature and an average annual return of 40%, it has become the preferred reserve asset to hedge against excess cash. Even large tech companies are starting to follow suit: Microsoft shareholders will vote in December on whether to adopt Bitcoin as a reserve asset. Although management has stated 'no,' strong shareholder interest could change the decision, potentially triggering broader adoption of Bitcoin by publicly traded companies.
Regulation
Focus
SEC approves Bitcoin ETF options: an important step toward the integration of mainstream financial products.
Pennsylvania's Bitcoin Rights Bill: a milestone protecting Bitcoin self-custody and payment rights.
Thailand proposes crypto fund access: potential increase in crypto adoption in Asia.
Prediction
Recent regulatory developments, particularly the approval of Bitcoin ETF options and the proactive legislative movement in the U.S., could significantly boost investor confidence. This may lead to a surge in Bitcoin prices, especially if these initiatives are seen as paving the way for more mainstream financial integration. Additionally, monitoring regulatory dynamics from key markets such as the U.S. may influence the regulatory approach, while countries like those in Asia are opening up to crypto funds, potentially affecting regional and global market sentiment.
Insights
October is a pivotal moment for Bitcoin's regulatory landscape, with the SEC's approval of Bitcoin ETF options trading evidencing increasing acceptance of cryptocurrencies in traditional finance. This development not only provides investors with additional hedging and speculation tools but could also enhance Bitcoin's liquidity and price stability in the long run.
Pennsylvania recently passed legislation recognizing Bitcoin's self-custody and payment rights, which may influence other U.S. states. This could create a more Bitcoin-friendly environment, reducing concerns over strict regulation and fostering an investment-friendly atmosphere. In Asian markets, particularly Thailand's allowance for private funds to invest in cryptocurrencies, suggests a growing acceptance of cryptocurrencies in one of the world's largest economic regions, potentially driving trends in neighboring countries.
Macroeconomic Outlook
Highlights
The rising U.S. federal debt highlights the limitations of fiat currency, driving interest in Bitcoin.
The sustained inflation shown by CPI enhances Bitcoin's appeal as a hedging tool. Amid concerns about the long-term stability of the dollar, institutional investors are increasingly considering Bitcoin.
Prediction
Bitcoin 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 Bitcoin's potential appreciation in the coming months.
Insights
In a high-debt, inflation-prone market environment, Bitcoin's value proposition is clearer than ever. The first chart below shows the relationship between federal debt and Bitcoin prices. As federal debt rises to unprecedented levels, the sustainability of the dollar as a store of value is increasingly questioned. Investors, especially institutional investors, are seeking alternatives that are not affected by currency devaluation. Bitcoin's limited supply can effectively hedge against the risks posed by excessive debt accumulation and currency devaluation.
The second chart below shows the sustained rise in the Consumer Price Index (CPI) relative to Bitcoin, indicating that even when excluding volatile categories like food and energy, inflation rates remain high. This reinforces Bitcoin's position as a long-term store of value that can maintain purchasing power during periods of economic uncertainty. With no signs of inflation easing and federal debt continuously expanding, Bitcoin holds a unique position as a strategic asset for preserving value and hedging against economic instability.
Price Prediction
Focus
Price trends are about to close at historical highs on daily, weekly, and monthly charts, which is very bullish across all these time frames.
In Bitcoin's history, the MRl has only closed with a green star on the 2-month bar chart for the 7th time. All six previous instances led to gains of over 100% in the following year.
The cup and handle pattern and Fibonacci extensions provide additional bullish price targets in the range of $100,000 to $105,000.
Prediction
The biggest concern right now is 'herd mentality,' as everyone expects prices to exceed $100,000. Personally, I haven't seen anything concerning in the TA charts, on-chain analysis, four-year halving cycle analysis, mining industry, or any regulatory setbacks. Many are buying Bitcoin in anticipation of greater regulatory recognition under the Trump administration.
Insights
Bitcoin is poised for a potential bull market, with technical indicators pointing to three price targets. The Tone Vays MRl indicator on the 2-month chart shows an increase of at least 100% over the past six months, suggesting a peak of around $140,000 or higher by the second quarter of 2025. This pattern is consistent with the significant rebounds seen in 2017 and 2021.
Additionally, the cup and handle patterns on the weekly and monthly charts point to a target of $105,000, which typically materializes within 4-6 months based on historical trends. Finally, Fibonacci extensions show an initial target of $102,000, with the potential to reach higher levels of $155,000 and $210,000 if previous cycles repeat.
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