Written by: Bitcoin Magazine Pro
Translated by: Felix, PANews
Bitcoin Magazine Pro published a review of Bitcoin in October and discussed several key topics, including the decline in Bitcoin exchange balances, ETF inflows exceeding $5 billion, and optimistic forecasts that may redefine Bitcoin's value in the next quarter. Below are the report details.
Main Highlights:
On-chain Bitcoin analysis: Bitcoin exchange balances are at historical lows, indicating growing holder confidence and an increasing preference for 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 U.S. still maintains the largest share of hash power.
Bullish price predictions: Bitcoin analyst Tone Vays predicts a potential price range 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 preferences.
Addresses holding over 100 coins hit a historic high, reflecting the expansion of adoption.
Strong on-chain fundamentals indicate that price momentum will continue until 2025.
Forecast
The reduction in Bitcoin exchange balances and the continuous growth in wallet adoption indicate the potential for price increases. Investors should focus on the inflow of funds into exchanges and the growth of high-balance wallets as indicators of demand and potential price strength for Q4 and beyond.
Insights
In October, the total Bitcoin balance on exchanges significantly decreased, currently slightly below 3 million, as shown in Chart 1. This decline indicates that investors are increasingly choosing self-custody over leaving funds on exchanges, a trend often associated with long-term holding strategies. When exchange balances decrease while prices rise, it suggests confidence in the medium to long-term outlook for Bitcoin. This shift towards self-custody may become a constraint on supply, 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, while China, despite the mining ban, has seen a quiet increase in activity.
Emerging markets like Ethiopia and Argentina are also seeing growth, which may affect hash power distribution.
Forecast
If the 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, leveraging its abundant natural resources to provide cost-effective energy for miners. This expansion is driven by regional support for mining as a lucrative strategic economic activity. Meanwhile, despite an official ban, underground mining in China continues and has been increasing in recent years. This dual development suggests a shift in mining power, which may affect market dynamics, especially as global hash power distribution is no longer dominated by the U.S.
While the U.S. continues to lead in Bitcoin hash power, the rapid rise of Russia and resilience of China present challenges for U.S. miners. Emerging markets like 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. With these trends continuing, U.S. Bitcoin miners may face fiercer competition in securing energy resources and maintaining profitability under volatile market conditions.
ETFs
Highlights
BlackRock's BTC ETF (lBlT) had a maximum inflow of $872 million in a single day, with a net trading volume of $4.6 billion for the month.
Fidelity's maximum inflow in a single day was $239 million, but its net trading volume was only $496.8 million, which pales in comparison to lBIT.
Bitwise (BITB) had a maximum inflow of $100.2 million in a single day, with a net trading volume of $137.3 million for the month.
Forecast
In the short term, volatility in BTC ETFs is expected. While IBlT remains the leader in trading volume and liquidity, it may not provide the best trading volatility. Relative sizes of FBTC and ARKB have shown significant fluctuations, providing the best trading opportunities.
Insights
In October, net inflows into Bitcoin ETFs reached a record approximately $5.415 billion (Chart 1). The popularity and demand for these products prompted the U.S. SEC to further approve options trading for many BTC ETF products. Increased speculation, leverage, margin calls, market maker delta hedging, and sentiment effects may impact BTC ETFs, which will have a continued effect on the direct Bitcoin spot market itself.
BlackRock's lBlT leads by a wide margin, with a monthly trading volume of $4.6 billion, making it the most actively traded. For traders looking to act based on market dynamics, this also means that for every trade, if it's lBlT, there will be someone willing to take it on. Other ETF options, such as Fidelity's FBTC, Ark 21Shares' ARKB, and Bitwise's BlTB, may offer 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 for entering favorable positions during these imbalances.
Stocks
Highlights
MicroStrategy (MSTR) announced a three-year, $42 billion Bitcoin investment plan aimed at increasing more 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 the announcement of its 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 the bullish trend of BTC, most have not benefited from Bitcoin's year-to-date (YTD) increase of 63.9% (Chart 1). Marathon Digital (MARA), Riot Platforms (RlOT), and CleanSpark (CLSK) have fallen -31.42%, -38.98%, and -6.39% YTD respectively, indicating operational difficulties or sensitivity to crypto mining costs, while Tesla (TSLA) has risen only 0.2% since the beginning of 2024, and Block Inc. (SO) has dropped 6.72%. While Coinbase (COlN) and Galaxy Digital Holdings (GLXY or BRPHE) have performed positively, their performance has not exceeded the 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 three-year, $42 billion Bitcoin investment plan, continuing the company's buy-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. As Bitcoin approaches the next bull market, companies should consider adopting Bitcoin holding strategies.
Derivatives
Highlights
Bitcoin recently surpassed $70,000, with short positions liquidating over $100 million.
Funding rates remain relatively neutral, possibly 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.
Forecast
Once the uncertainty of the U.S. elections and the subsequent market volatility pass, Bitcoin is expected to rise before the end of the year.
Insights
Over the past month, BTC has shown an upward trend. Although there have been downward corrections along the way, most liquidations were against traders trying to short BTC.
The U.S. elections have brought 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 we see funding rates at +0.06. By then, caution may be necessary, but we are far from those levels at the moment.
Adoption
Highlights
MicroStrategy (MSTR) announced a $42 billion capital plan, including a $21 billion ATM stock issuance to buy 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) decided to use Bitcoin as a financial reserve, benefiting shareholders and driving Bitcoin adoption among publicly traded companies. Since January, companies like Metaplanet (Asia's largest public Bitcoin holder, holding 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 of 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 Bitcoin purchases.
Inspired by MicroStrategy's success, Japan's Metaplanet adopted a Bitcoin reserve strategy this spring, currently holding over 1,000 BTC, making it Asia's largest publicly traded Bitcoin holder. Due to Bitcoin's deflationary nature and 40% average annual return, it has become the preferred reserve asset to hedge against excess cash. Even major tech companies are beginning to follow suit: Microsoft 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, potentially triggering wider Bitcoin adoption among publicly traded companies.
Regulation
Key Points
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 self-custody and payment rights.
Thailand proposes crypto fund access: Asian crypto adoption may increase.
Forecast
Recent regulatory developments, particularly the approval of Bitcoin ETF options and active legislative efforts in the U.S., may significantly boost investor confidence. This could lead to a surge in Bitcoin prices, especially if these measures are seen as paving the way for greater mainstream financial integration. Additionally, regulatory dynamics from key markets like the U.S. should be monitored, as political changes in the U.S. may affect regulation, while countries like those in Asia are opening up to crypto funds, potentially influencing regional and global market sentiment.
Insights
October is a crucial moment for the regulatory landscape of Bitcoin, with the SEC's approval of Bitcoin ETF options trading demonstrating the growing acceptance of cryptocurrencies by 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's recent legislative recognition of Bitcoin's self-custody and payment rights may influence other U.S. states. This could create a friendlier environment for Bitcoin, reducing concerns over strict regulation and fostering a favorable investment atmosphere. In Asian markets, particularly Thailand's initiative to allow private funds to invest in cryptocurrencies, suggests broad acceptance of cryptocurrencies in one of the world's largest economic zones, potentially driving trends in neighboring countries.
Macroeconomic Outlook
Highlights
The rising U.S. federal debt highlights the limitations of fiat currency and drives interest in Bitcoin.
The persistent inflation shown by the 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.
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 market environment characterized by high debt and inflationary tendencies, 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, particularly institutional ones, 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 Consumer Price Index (CPI) relative to the ongoing rise in inflation for Bitcoin, even excluding volatile categories like food and energy, the inflation rate remains high. This solidifies Bitcoin's position as a long-term store of value that can maintain purchasing power during economic uncertainty. With no signs of inflation easing and federal debt continuously swelling, Bitcoin holds a unique position as a strategic asset for preserving value and hedging against economic instability.
Price Predictions
Key Points
Price trends are poised 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 a 2-month histogram for the 7th time. All six previous instances led to an increase 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
Currently, the biggest concern is 'herd mentality', with everyone expecting prices to exceed $100,000. Personally, I haven't 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 anticipating that it will gain greater regulatory recognition under a 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 around $140,000 or higher by the second quarter of 2025. This pattern is consistent with the significant rebounds of 2017 and 2021.
Additionally, 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, potentially reaching higher levels of $155,000 and $210,000 if previous cycles repeat.
