Written by: Bitcoin Magazine Pro
Compiled by: Felix, PANews
Bitcoin Magazine Pro published a review of Bitcoin in October and discussed some key topics, including the decline in Bitcoin's exchange balances, the inflow of over $5 billion into ETFs, and optimistic forecasts that may redefine Bitcoin's value in the upcoming quarter. Below are the report details.
Key Highlights:
Bitcoin on-chain analysis: Bitcoin exchange balances are at historical lows, indicating strengthening holder confidence, with more individuals choosing self-custody.
Bitcoin ETF surge: In 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 US still retains the largest share of computing power.
Bullish price prediction: Bitcoin analyst Tone Vays predicts a potential price range for Bitcoin of $102,000 to $140,000 by mid-2025, supported by strong technical indicators.
On-chain Bitcoin
Highlights
BTC exchange balances hit a new low, indicating a rise in self-custody preference.
Addresses holding over 100 coins have reached a historical high, reflecting the expansion of adoption.
Strong on-chain fundamentals indicate that price momentum will continue until 2025.
Forecast
The reduction in Bitcoin's exchange balances and the continuous increase in wallet adoption signal potential for price increases; investors should monitor exchange inflows and the growth of high-balance wallets as indicators of demand and potential price strength in Q4 and beyond.
Insights
In October, Bitcoin's total balance on exchanges significantly decreased, currently just below 3 million, as shown in Figure 1. This decline indicates that investors are increasingly choosing self-custody rather than keeping funds on exchanges, a trend that is typically associated with long-term holding strategies. When exchange balances decrease while prices rise, it indicates confidence in Bitcoin's medium to long-term outlook. This shift towards self-custody could become a supply-side constraint, potentially creating upward pressure on prices if demand remains strong.
Mining
Highlights
Russia and China currently contribute significantly to global Bitcoin computing power.
The United States remains in the lead in computing power, but Russia occupies second place, while China, despite its mining ban, is quietly increasing its activities.
Emerging markets like Ethiopia and Argentina are also seeing growth, which may affect the distribution of computing power.
Forecast
If computing power in China and Russia continues to grow, US miners may face new global competition next year.
Insights
Recently, Russia and China are becoming key players in the global Bitcoin mining sector. Russia is now the second-largest contributor to global computing power. Its abundant natural resources allow miners to access cost-effective energy. This expansion is driven by the region's support for mining as a profitable strategic economic activity. Meanwhile, despite an official ban from China, underground mining continues and has been increasing in recent years. This dual development suggests a shift in mining power, which could impact market dynamics, especially as global computing power distribution is no longer dominated by the US.
Although the US remains in the lead in Bitcoin computing power, the rapid rise of Russia and the resilience of China pose challenges for US miners, while emerging markets such as Ethiopia and Argentina are also ramping up mining activities, creating a more decentralized global mining network. This diversification could 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, both in securing energy resources and maintaining profitability under volatile market conditions.
ETFs
Highlights
BlackRock's BTC ETF (IBIT) saw a maximum daily inflow of $872 million, with a net trading volume of $4.6 billion for the month.
Fidelity saw a maximum daily inflow of $239 million, but a net trading volume of only $496.8 million, a stark comparison to IBIT.
Bitwise (BITB) saw a maximum daily inflow of $100.2 million, with a net trading volume of $137.3 million for the month.
Forecast
Short-term volatility is expected for BTC ETFs. While IBIT remains the leader in trading volume and liquidity, it may not provide the best trading volatility. FBTC and ARKB show significant relative scale fluctuations, providing the best trading opportunities.
Insights
In October, net inflows to Bitcoin ETFs reached a record approximately $5.415 billion (Figure 1). The popularity and demand for these products 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 will have a continuing effect on the direct Bitcoin spot market itself.
BlackRock's IBIT is far ahead, with monthly trading volume of $4.6 billion, the most actively traded. This also means that for traders looking to act based on market dynamics, there will be someone willing to take every trade if it's IBIT. Other ETF options, such as Fidelity's FBTC, Ark 21Shares' ARKB, and Bitwise's BITB, can provide better entry opportunities as trading volumes for each option have decreased (Figure 2). While ETFs strive to perfectly track BTC market prices, lower liquidity and trading volumes can create opportunities for entering favorable positions during these imbalanced periods.
Stocks
Highlights
MicroStrategy (MSTR) announced a three-year $42 billion Bitcoin investment plan aimed at increasing its BTC holdings 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 increased 838.82% year-to-date primarily due to its announcement of adopting a Bitcoin balance sheet strategy.
Forecast
Driven by positive sentiment for 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
While intuitively Bitcoin-related stocks should follow BTC's bullish trend, most have not benefited from Bitcoin's 63.9% year-to-date increase (Figure 1). Marathon Digital (MARA), Riot Platforms (RIOT), and CleanSpark (CLSK) have seen year-to-date declines of -31.42%, -38.98%, and -6.39%, respectively, indicating operational difficulties or sensitivity to crypto mining costs. Tesla (TSLA) has risen only 0.2% since early 2024, while Block Inc. (SO) has dropped 6.72%. Though Coinbase (COIN) and Galaxy Digital Holdings (GLXY or BRPHF) have performed positively, their performance has not exceeded that of spot Bitcoin price movements.
In contrast, MicroStrategy (MSTR) surged 263.68%, reflecting the impact of its leveraged Bitcoin holdings and investor confidence in its Bitcoin-focused strategy. MicroStrategy's Executive Chairman Michael Saylor announced a $42 billion Bitcoin 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% year-to-date since announcing its Bitcoin reserve strategy earlier this year. As Bitcoin is 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.
The funding rate remains relatively neutral, possibly due to the uncertainty surrounding the US 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.
Forecast
Once the uncertainty from the US elections and the subsequent market volatility pass, Bitcoin is expected to rise by 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 US election brings short-term uncertainty to the Bitcoin derivatives market. Significant volatility is expected in the market within the coming weeks.
However, once any directional impulse reaction fades, the derivatives market is expected to stabilize again. Currently, the funding rate in this phase of the Bitcoin market cycle remains very low. This is bullish and should allow Bitcoin prices to rise significantly in the coming months until the funding rate reaches +0.06. By then, caution may be necessary, but we are still far from those levels.
Adoption
Highlights
MicroStrategy (MSTR) announced a $42 billion capital plan that includes $21 billion in 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 shareholders' meeting in December to vote on a potential Bitcoin financial strategy.
Forecast
MicroStrategy (MSTR) has decided to use Bitcoin as a financial reserve, benefiting shareholders and driving Bitcoin adoption among publicly traded entities. Since January, companies like Metaplanet (Asia's largest public Bitcoin holder, with over 1,000 BTC), Semler Scientific, and Samara Asset Group have followed suit. This trend may influence Microsoft (MSFT) shareholders to vote on similar strategies 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 the stock issuance and aims to raise $21 billion in fixed-income securities to fund Bitcoin purchases.
Inspired by MicroStrategy's success, Japan's Metaplanet adopted a Bitcoin reserve strategy this spring and currently holds over 1,000 BTC, becoming the largest publicly traded Bitcoin holder in Asia. Due to Bitcoin's deflationary nature and average annual returns of 40%, it has become the preferred reserve asset to hedge excess cash, and even large tech companies are starting to follow suit: Microsoft's shareholders will vote in December on whether to adopt Bitcoin as a reserve asset. Despite management's stated 'rejection', strong shareholder interest may change the decision, possibly triggering broader adoption of Bitcoin among publicly traded companies.
Regulation
Key Points
The SEC's approval of Bitcoin ETF options: an important step towards mainstream financial product integration.
Pennsylvania's Bitcoin Rights Bill: a milestone in protecting Bitcoin's self-custody and payment rights.
Thailand's proposal for crypto fund access: potential increase in Asian crypto adoption.
Forecast
Recent regulatory developments, particularly the approval of Bitcoin ETF options and active legislative movements in the US, may significantly enhance investor confidence. This could 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 like the US, where political changes may affect regulatory approaches, and countries like those in Asia opening up to crypto funds could impact regional and global market sentiment.
Insights
October is a crucial moment for Bitcoin's regulatory landscape, with the SEC approving Bitcoin ETF options trading, demonstrating the growing acceptance of cryptocurrencies in traditional finance. This development not only provides investors with additional hedging and speculative tools but may also improve Bitcoin's liquidity and price stability in the long run.
Pennsylvania recently passed legislation recognizing Bitcoin's right to self-custody and payment, which may influence other US states. This could create a more Bitcoin-friendly environment, reducing concerns over strict regulations and fostering an investment-friendly atmosphere. In Asia, especially Thailand's initiative to allow private funds to invest in cryptocurrencies, suggests widespread acceptance of cryptocurrencies in one of the world's largest economic zones, potentially driving trends in neighboring countries.
Macroeconomic Outlook
Highlights
The rising federal debt in the US highlights the limitations of fiat currency and drives interest in Bitcoin.
The sustained inflation shown by the CPI enhances Bitcoin's attractiveness as a hedge. Amid concerns about the long-term stability of the US dollar, institutional investors are increasingly considering Bitcoin.
Forecast
Bitcoin 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 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 climbs to unprecedented levels, the sustainability of the US dollar as a store of value is increasingly questioned. Investors, especially institutional ones, are seeking alternatives that are not affected by currency depreciation. Bitcoin's limited supply effectively hedges against the risks posed by excessive debt accumulation and currency devaluation.
The second chart below shows the sustained rise of the Consumer Price Index (CPI) relative to Bitcoin, indicating that even after 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 economic uncertainty. With no signs of a reduction in inflation and continuously expanding federal debt, Bitcoin holds a unique position as a strategic asset for preserving value and hedging against economic instability.
Price Prediction
Key Points
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. The previous six instances led to gains exceeding 100% in the following year.
Cup and handle chart patterns and Fibonacci extensions provide additional bullish price targets in the range of $100,000 to $105,000.
Forecast
The biggest concern currently is 'herd mentality', with everyone expecting prices to surpass $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 a Trump administration.
Insights
Bitcoin is preparing for a potential bull market, with technical indicators pointing to three price targets. The Tone Vays MRL indicator on the 2-month chart suggests a minimum increase of 100% over the past six months, indicating a peak of around $140,000 or higher by Q2 2025. This pattern aligns with significant 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 according to 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.
