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🥜 Guess who's buying
PLUS: Halving Doesn't Matter
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GM to all you crypto nuts. Crypto Nutshell #380 chefin’ it up.. 👨🍳 🥜
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What we’ve cooked up for you today…
🇩🇪 Now it’s getting serious
🚧 The halving doesn’t matter
🤑 The ETFs buy the dip
💰 And more…
MARKET WATCH ⚖️
Prices as at 8:05am ET
Only the top 20 coins measured by market cap feature in this section
NOW IT’S GETTING SERIOUS… 🇩🇪
BREAKING: German gov’t transfers another $900M in Bitcoin, adding to BTC’s selling pressure
Germany just won’t stop…
This time they’ve unloaded 16,309 Bitcoin, worth ~$920 million.
According to Arkham intelligence, a German government wallet transferred the Bitcoin to exchanges in multiple transactions.
This marks its largest single-day Bitcoin liquidation so far.
But it’s not over yet…
As it stands, the German government still holds 23,787.7 Bitcoin.
It’s less than half of their original holdings, but it’s very likely that they’ll continue to unload Bitcoin.
It’s also worth pointing out Bitcoin’s resilience.
Although Bitcoin did dip to below $55,200 when this news broke, it’s since recovered.
In fact, it’s actually bounced up by 2.85% in the last 24 hours. (at time of writing)
Perhaps the market has now fully priced in the German government’s selling spree?
Either way, we think the German government will deeply regret this decision by the end of this year…
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THE HALVING DOESN’T MATTER 🚧
The Bitcoin halving is irrelevant.
It no longer has a huge impact on price.
That’s the latest hot take out from Fred Krueger.
Fred Krueger recently put out a twitter post titled:
The Big Picture: What we know with high probability about Bitcoin
Let’s break down 3 of the highlights.
1. Every day, new people adopt Bitcoin as a savings technology.
If you’ve seen any of Krueger’s work before, you’ve surely come across the Bitcoin Power Law Model.
In a nutshell, if you plot Bitcoin’s price and time in log scale, you see a very clear relationship. (Power Law’s are extremely rare)
But you also see a similar relationship when you plot the number of Bitcoin addresses holding at least 1 BTC vs time… (both in log scale)
For something like that to also be a power law… it’s quite odd.
Fred explains the simple takeaway from this data:
“This thing is just going up pretty steadily in good years or bad years. Adoption is growing regardless of markets. Even in good markets or bad markets, people are adopting Bitcoin.”
2. The halvings are a key growth driver, but no longer have massive impact
By January 2013, half the Bitcoin supply was mined.
And as of today, over 94% of the total Bitcoin supply has been mined.
“As of now, 94% of the coins have been mined. And we’re only having 0.8% of the total supply that’s going to be mined next year.”
Perhaps a controversial take, but Krueger believes that the halving itself no longer has a huge impact on price.
Scarcity is no longer what drives Bitcoin’s price growth
The majority of the Bitcoin supply is already out there.
Going one step further, Krueger also shuts down PlanB’s stock-to-flow model.
“There really is no correlation between available supply and the price.”
3. The data is cyclical
Although the halving may not be as important as it once was…
Fred does acknowledge that clearly there is some cyclicality going on here. (but is it driven by the halving?)
The chart below clearly shows that we’ve had 3 good years followed by 1 bad year for the last three cycles.
That’s a clear pattern.
Right now we’re in the second year of the cycle.
And historically, the third year of the cycle has been the star of the show.
“2017 was a monster year, 2013 was a monster year. Lots of room to believe that we’re going to have some big move in the next two years.”
So from past performance we can expect next year to outperform this year.
Now since Fred has a background Math, a lot of what he talks about can be quite complicated.
But last month we had the chance to interview Fred ourselves and it was a banger.
Fred gives a super easy to understand explanation of the Bitcoin Power Law model and how it works.
Trust us, you won’t regret it. 😎
THE ETFs BUY THE DIP 🤑
Inflows are back baby!
Last week Digital asset funds saw inflows totalling $441 million.
Looks like institutional investors took the recent price weakness as a great buying opportunity.
Bitcoin saw the bulk of the inflows at $398 million for the week.
Unusually this was only 90% of the total flows, as investors chose to invest across a range of altcoins last week.
Solana also experienced significant inflows at $16.3 million.
And Ethereum finally broke it’s outflow streak, with $10.2 million coming in for the week.
However, Ethereum still remains as the only altcoin with a net outflow year-to-date.
All other altcoins experienced minor inflows.
The United States once again experienced the largest inflows at $384 million for the week.
Hong Kong, Switzerland and Canada also saw inflows of $32.2m and $23.8m & 12.0m respectively.
However Germany and Sweden experienced net outflows of $22.7m and $3.3m.
After a three week streak of outflows, inflows are finally back.
The main takeaway here is that investors in digital asset funds weren’t shaken out by the recent correction.
In fact, they jumped at the opportunity to buy the dip…
There’s a lesson in there.
Let’s see if this is the start of another inflow streak.
CRACKING CRYPTO 🥜
BlackRock's BUIDL fund inches toward $500 million amid crypto market struggles. BlackRock's $491 million BUIDL fund sees rapid growth despite broader crypto market slump.
VanEck and 21Shares send amended Ether ETF filings to SEC. The SEC must approve all S-1 registration statements from asset managers before they can list and trade shares of spot Ether exchange-traded funds on U.S. exchanges.
Trump's Official Republican Platform Pledges to Halt Crypto 'Crackdown'. Though not listing it as a top priority, the Republican National Committee adopted a platform that aims to boost digital assets innovation.
Institutions Buy the Dip: Bitcoin ETFs Rebound After Weeks of Losses. Crypto funds raked in $441 million last week, suggesting that institutions bought the dip as Bitcoin's price plunged.
WHAT WE’RE READING 📚
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CAN YOU CRACK THIS NUT? ✍️
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What is Bitcoin's average block time? |
MEME CORNER 😂
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Trivia Answer: C) 10 minutes 🥳
Block time refers to the average time it takes to create (or mine) a new block on the blockchain. Bitcoin’s block time is 10 minutes
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