Original author: Bitcoin Magazine Pro
Original translation: Felix, PANews
Bitcoin Magazine Pro published an article reviewing Bitcoin in October and discussing some key topics, including the decline in Bitcoin exchange balances, ETF fund inflows exceeding $5 billion, and optimistic predictions that may redefine Bitcoin's value in the coming quarter. The following are the details of the report.
Key Highlights:
Bitcoin On-Chain Analysis: Bitcoin exchange balances are at historic lows, indicating that holders are increasingly confident and are increasingly choosing self-custody.
Bitcoin ETF surge: October saw ETF inflows exceeding $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 retains the largest share of hash power.
Bullish price forecast: 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 balance hits a new low, indicating a rise in self-custody preference
Addresses with over 100 BTC reach a historical high, reflecting an expanding adoption range
Strong on-chain fundamentals suggest that price momentum will persist until 2025.
Forecast
The decrease in Bitcoin exchange balances and the continuous growth in wallet adoption signal potential for price increases. Investors should focus on exchange inflows and growth in high-balance wallets as indicators of demand and potential price strength for Q4 and beyond.
Insights
In October, the total balance of Bitcoin on exchanges significantly decreased, currently slightly below 3 million, as shown in Figure 1. This decline indicates 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 medium to long-term outlook. This shift towards self-custody may become a supply-side constraint, potentially adding upward pressure on prices given sustained demand.
Mining
Highlights
Russia and China currently make significant contributions to global Bitcoin hash power.
The U.S. remains the leader in hash power, but Russia holds the second position, and despite a mining ban, activities in China are quietly increasing.
Emerging markets like Ethiopia and Argentina are also seeing growth, which may affect hash power distribution.
Forecast
If hash power in China and Russia continues to grow, U.S. miners may face new global competition next year.
Insights
Recently, Russia and China are becoming key players in the global Bitcoin mining space. Russia is now the second-largest contributor to global hash power. Its utilization of abundant natural resources allows miners to obtain cost-effective energy. This expansion is driven by regional support for mining as a profitable strategic economic activity. Meanwhile, despite China issuing an official ban, underground mining continues, with increasing underground mining activities in China in recent years. This dual development suggests a shift in mining power, which may 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 hash power, the rapid rise of Russia and resilience of China pose challenges for U.S. miners, with emerging markets like Ethiopia and Argentina 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, U.S. Bitcoin miners may face stiffer competition, both in securing energy resources and maintaining profitability under volatile market conditions.
ETFs
Highlights
BlackRock's BTC ETF (IBIT) saw a maximum single-day inflow of $872 million, with net trading volume of $4.6 billion that month.
Fidelity saw a maximum single-day inflow of $239 million, but net trading volume was only $496 million, which is insignificant compared to IBIT.
Bitwise (BITB) saw a maximum single-day inflow of $100.2 million, with a net trading volume of $137.3 million that month.
Forecast
BTC ETFs are expected to experience volatility in the short term. While IBIT remains a leader in trading volume and liquidity, it may not provide optimal trading volatility. FBTC and ARKB show significant relative fluctuations, providing the best opportunities for trading.
Insights
In October, the net inflow for Bitcoin ETFs reached a record approximately $5.415 billion (Figure 1). The popularity and demand for these products prompted the U.S. SEC to further approve options trading on many BTC ETF products. Increased speculation, leverage, margin calls, market maker delta hedging, and sentiment effects may influence BTC ETFs, which will have a continued effect on the direct Bitcoin spot market itself.
BlackRock's IBIT is far ahead, with a monthly trading volume of $4.6 billion, being the most actively traded. For traders looking to act according to market dynamics, this also means there will be someone willing to take on each trade if it is IBIT. Other ETF options, such as Fidelity's FBTC, Ark 21Shares' ARKB, and Bitwise's BITB, may provide better entry opportunities as trading volumes have decreased for each option (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 imbalances.
Stocks
Highlights
MicroStrategy (MSTR) announces a three-year $42 billion Bitcoin investment plan to increase BTC on its balance sheet.
Despite Bitcoin's 63.9% rise 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, mainly due to its announcement of adopting a Bitcoin balance sheet strategy.
Forecast
Driven by the positive sentiment surrounding Bitcoin in early Q4, Bitcoin-related stocks could rise in the coming months. Stocks like Semler Scientific (SMLR) may provide opportunities, as they quietly incorporate Bitcoin into their balance sheets, offering positive upward momentum for the stock's value.
Insights
While intuitively Bitcoin-related stocks should follow the bullish trend of BTC, most have not benefited from Bitcoin's 63.9% YTD increase (Figure 1). Marathon Digital (MARA), Riot Platforms (Riot), and CleanSpark (CLSK) have dropped -31.42%, -38.98%, and -6.39% YTD, respectively, indicating operational challenges or sensitivity to crypto mining costs. Tesla (TSLA) has only risen 0.2% since early 2024, and Block Inc. (SO) has dropped 6.72%. While Coinbase (COIN) and Galaxy Digital Holdings (GLXY or BRPH) have performed positively, their performance has not outpaced the spot Bitcoin price trend.
In contrast, MicroStrategy (MSTR) surged by 263.68%, reflecting the impact of its leveraged Bitcoin holdings and investor confidence in its Bitcoin-focused strategy. MicroStrategy executive chairman Michael Saylor announced a three-year $42 billion Bitcoin investment plan, continuing the company's buy-and-hold strategy (Figure 2). In Japan, Metaplanet Inc. (TYO: 3350) has grown by 838.82% year-to-date since announcing its Bitcoin reserve strategy earlier this year. With Bitcoin at the cusp of the next bull market, companies should consider adopting Bitcoin holding strategies.
Derivatives
Highlights
Bitcoin recently broke through $70,000, with short positions being liquidated exceeding $100 million.
Funding rates remain relatively neutral, likely due to 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.
Forecast
Once the uncertainty of the U.S. elections and subsequent market volatility pass, Bitcoin is expected to rise before the end of the year.
Insights
BTC has been on an upward trend over the past month. While 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, with significant volatility expected in the coming weeks.
However, once any directional impulse reaction fades, the derivatives market is expected to stabilize again. Currently, the funding rates in this phase of the Bitcoin market cycle remain very low. This is bullish and should allow Bitcoin prices to rise significantly in the coming months until we see funding rates +0.06. At that time, caution may be necessary, but we are far from those levels currently.
Adoption
Highlights
MicroStrategy (MSTR) announces a $42 billion capital plan, which includes 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 a potential Bitcoin financial strategy.
Forecast
MicroStrategy (MSTR) decides to use Bitcoin as a financial reserve, benefiting shareholders and driving Bitcoin adoption in publicly traded companies. Since January, companies like Metaplanet (the largest public Bitcoin holder in Asia, holding 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 of Class A common stock over the next three years to purchase Bitcoin. Michael Saylor's $42 billion capital plan includes the issuance of $21 billion in stock and aims to raise $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 earlier this spring, currently holding over 1,000 BTC, becoming the largest publicly traded Bitcoin holder in Asia. Due to Bitcoin's deflationary nature and an average annual return of 40%, it has become the preferred reserve asset for hedging excess cash, and 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 stated 'no,' strong shareholder interest may change the decision, potentially triggering broader adoption of Bitcoin by publicly listed companies.
Regulation
Focus
SEC approves Bitcoin ETF options: an important step towards mainstream financial product integration.
Pennsylvania's Bitcoin rights bill: a milestone in protecting Bitcoin self-custody and payment rights.
Thailand proposes crypto fund access: Asia's crypto adoption rate may increase
Forecast
Recent regulatory developments, particularly the approval of Bitcoin ETF options and positive legislative movement in the U.S., may significantly boost 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, monitor regulatory dynamics from key markets like the U.S., where political changes may affect regulation, while countries like those in Asia open up to crypto funds, potentially impacting regional and global market sentiment.
Insights
October is a critical moment for Bitcoin's regulatory landscape, as the SEC's approval of Bitcoin ETF options trading demonstrates a growing acceptance of cryptocurrencies in traditional finance. This development not only provides investors with additional hedging and speculative tools but may also enhance Bitcoin's liquidity and price stability in the long term.
Pennsylvania's recent legislation recognizing Bitcoin's self-custody and payment rights may influence other U.S. states. This could create a more Bitcoin-friendly environment, reducing concerns over strict regulation and fostering an atmosphere conducive to investment. In Asia, particularly Thailand's move to allow 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.
Continuous inflation shown by CPI enhances Bitcoin's appeal as a hedge. Amid concerns about the long-term stability of the 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 CPI and federal debt levels can provide early indicators for Bitcoin's potential appreciation in the coming months.
Insights
In a highly indebted, 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 dollar as a store of value is increasingly questioned. Investors, particularly institutional ones, are seeking alternatives that are not affected by currency devaluation. Bitcoin's limited supply effectively hedges against the risks posed by excessive debt accumulation and currency devaluation.
The second chart below shows the continuous rise of the Consumer Price Index (CPI) relative to Bitcoin, with inflation rates remaining high even when excluding volatile categories like food and energy. This solidifies Bitcoin's status as a long-term store of value that can maintain purchasing power during economic uncertainty. With no signs of inflation easing and federal debt continuing to swell, Bitcoin holds a unique position as a strategic asset for value preservation and hedging against economic instability.
Price prediction
Focus
Price movements 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, MRL has only closed with a green star on the 2-month histogram for the 7th time. All previous six instances led to gains exceeding 100% in the following year.
Cup and handle chart pattern and Fibonacci extension provide additional bullish price targets in the $100,000 to $105,000 range.
Forecast
The biggest concern currently is 'groupthink,' with everyone expecting prices to exceed $100,000. Personally, I have not seen anything concerning in TA charts, on-chain analysis, four-year halving cycle analysis, the mining industry, or any regulatory setbacks. Many are buying Bitcoin in anticipation that under Trump's administration, Bitcoin will receive greater regulatory recognition.
Insights
Bitcoin is poised for a potential bull market, with technical indicators pointing towards three price targets. Tone Vays' MRL indicator on the 2-month chart shows a potential increase of at least 100% over the past 6 months, suggesting it could peak at around $140,000 or higher by the second quarter of 2025. This pattern is consistent with substantial rebounds seen in 2017 and 2021.
Moreover, the cup and handle patterns on the weekly and monthly charts point to a target of $105,000, typically achieved within 4-6 months based on historical trends. Finally, Fibonacci extensions show an initial target of $102,000, which could reach higher levels of $155,000 and $210,000 if previous cycles repeat.
