Bitcoin Moves #31 — A weekly review of what’s moving Bitcoin and crypto markets
Bitcoin began to move higher this past week after the extended consolidation that began in early January.
The cryptocurrency is currently trading over $36,000. That’s higher than it was when we published our last Bitcoin Moves report last week, but just slightly lower than the Elon Musk-fueled pump near $37,000 that occured on Friday. The cryptocurrency has begun to move higher as altcoins such as ETH have set new all-time highs.
With the strength BTC has seen over the past week, $30,000 has been confirmed as a key support level where there are strong institutional buyers.
Bitcoin continued to see positive fundamental trends this past week, boosting the bull case. For instance, billionaire investor Mark Cuban confirmed in a blog that he sees BTC as a store of value, while Elon Musk chimed in with positive comments about the leading cryptocurrency.
MicroStrategy, the American business services company, also continued to accumulate BTC with cash on hand.
- Bitcoin began to push higher this past week, moving back over $36,000 after consolidating over the weekend.
- The cryptocurrency confirmed $30,000 as a key support level.
- Bitcoin gained mainstream attention this past week as billionaires Mark Cuban and Elon Musk independently confirmed they see value in the leading cryptocurrency.
- Ruffer, a large institutional holder of BTC, derisked its position this past week to secure some profits.
All prices are in USD and time zones are PST.
- Current BTC price: $36,100, up 12.4% from last week ($32,100)
- 24H high: $36,200
- 24H low: $33,800
- 24H change: +7%
- 24H BTC volume sits around $52.1 billion, up 6% from last week ($49.4 billion)
- Total circulating BTC: 18,617,462
- Bitcoin Dominance sits ~61.2%
- 30D high / low: $42,000 / $29,000
- 90D high / low: $42,000 / $14,000
- Bitcoin Volatility Index (BVI), 30D: 2.5%, up 33% on the past week (1.88%)
- Hash rate: 147.41 EH/s, flat over last week (147.55 EH/s)
- Network value to transaction ratio (NVT): 68.3
- U.S. dollar index (DXY): 91.1, up 1% from last week (90.18)
- SPX-BTC 90D correlation: 0.0707
Elon Musk talks about bitcoin in Clubhouse event
Elon Musk announced over the weekend that he would be participating in a Clubhouse event. Clubhouse is an exclusive social media application focused on Silicon Valley innovators and founders. The app has gained widespread notoriety and popularity in the crypto space seemingly since this event.
Heading into the Clubhouse, many in the cryptocurrency space were expecting the billionaire Tesla and SpaceX founder to speak about Bitcoin. A few days earlier, he had converted his Twitter bio to “#bitcoin,” a much-publicized move that caused the price of BTC to surge over 15% to $37,000 levels, according to OKCoin market data.
While Musk didn’t bring up bitcoin himself during the 90-minute Clubhouse event — which quickly filled to the room maximum of 5,000 individuals — he stated that he is a supporter of the leading digital currency:
“I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin.”
Musk added in this event that he thinks that bitcoin is “really on the verge of getting broad acceptance by conventional finance people.”
Mark Cuban & Ray Dalio bump bitcoin
Musk wasn’t the only billionaire talking about bitcoin this past week.
Billionaire investor and entrepreneur Mark Cuban, who owns the NBA’s Dallas Mavericks, discussed bitcoin on his personal blog. In his post on bitcoin, published on Jan. 31, he confirmed that he sees the cryptocurrency as a digital store of value:
“This digital store of value isn’t limited to Digital Goods of course. It has long included cryptocurrencies (CryptoAssets is what they should be called, they are rarely used as currency), like Bitcoin, Ethereum and so many others [… ] They all are Stores of Value with market cap leader Bitcoin having a decade plus long history of transactions and wealth generation.”
Cuban was joined this past week by Ray Dalio, the co-founder of the world’s largest hedge fund, Bridgewater Associates. Dalio wrote in a post published to his company’s website that Bitcoin is “one hell of an invention” and a potential “alternative gold-like asset.”
BIS head talks down Bitcoin
In less bullish news for BTC, the head of the Bank of International Settlements, Agustin Carstens, commented this past week that he still doesn’t see much merit in bitcoin.
The Bank of International Settlements is a supernational entity that has been dubbed “the central bank of central banks.”
In a speech on digital currencies and how they play into the future of the economy, Carstens repeated arguments of other bitcoin detractors, namely that the asset is speculative, consumes a large amount of energy, and is not backed by any fundamentals, noting:
“Perhaps the Bitcoin network should be seen more like a community of online gamers, who exchange real money for items that only exist in cyber space. Bitcoin poses as its own unit of account, but fluctuations in value mean it is unrealistic to set prices in bitcoin. This also undermines its usefulness as a means of exchange, and makes it a poor store of value.”
Carstens also said that there is evidence that bitcoin and the cryptocurrency markets may be subject to some “price manipulation”:
“The structure of the Bitcoin market is decidedly concentrated and opaque, and there is research evidence on price manipulation.”
These comments, however, may be falling on deaf ears as major institutional investors continue to pile into bitcoin — or at least express interest in doing so.
Miami mayor gives nod to the Bitcoin community
The mayor of the City of Miami has expressed support for the Bitcoin community this past week. Francis Suarez announced on Jan 27 that the official municipal website for Miami now hosts the Bitcoin white paper:
“The City of Miami believes in #Bitcoin and I’m working day and night to turn Miami into a hub for crypto innovation. Proud to say Miami is the first municipal government to host Satoshi’s White Paper on government site.”
This comes shortly after Republican Congressman Patrick McHenry made a similar move, posting the white paper on his official House of Representatives webpage last week.
The move to add the Bitcoin white paper to private and government-owned sites comes shortly after Craig Wright, an early Bitcoin adopter who claims to have founded the project, leveled lawsuits against Bitcoin.org and BitcoinCore.org for copyright infringement.
Guggenheim Investments can now buy BTC
Wall Street asset manager Guggenheim Partners is evidently able to add BTC to its balance sheets as of this week.
The prominent money manager revealed at the end of 2020 that it sees lots of potential in the leading cryptocurrency as an investment. It subsequently filed with the U.S. SEC to be able to purchase Grayscale Bitcoin Trust (GBTC) with some of its investment vehicles.
As pointed out by digital asset news outlet Bloqport, that filing with the SEC just became effective on Jan. 31. This gives the firm the opportunity to purchase $500 million worth of GBTC with one of its investment vehicles.
A crypto analyst known on Twitter as “Bitcoin Jack” spotted transactions on-chain that amounted to approximately $500 million. He speculated that these transactions may confirm that Guggenheim purchased bitcoin shortly after the filing became effective.
MicroStrategy adds to bitcoin position
Today, Feb. 2, American business services company MicroStrategy added to its bitcoin position, purchasing approximately 295 bitcoins for $10 million at an average price of about $33,800 per coin.
The firm currently holds over $2.5 billion worth of the cryptocurrency.
This latest purchase comes just about a week and a half after the firm — which made a name for itself in crypto last year with its bullish buys — made a similar investment of $10 million in BTC. Michael Saylor, CEO of MicroStrategy and outspoken bitcoin supporter, is expected to present on bitcoin to many corporate executives at a virtual event in the coming week.
Join MicroStrategy CEO Michael Saylor and OKCoin CEO Hong Fang in a fireside chat on Wednesday, Feb 3, at 10 a.m. PST as they delve deep into bitcoin and decentralized finance.
Ruffer derisks bitcoin position
According to a report from The Telegraph, British investment firm Ruffer has banked a $750 million profit from BTC.
The firm revealed that it had been holding the cryptocurrency late last year, making it yet another latest in a growing list of institutional bitcoin holders. There was some confusion about Ruffer’s involvement in the space because some initially thought that only a sub-fund had purchased a few million dollars in bitcoin. It was later revealed that the firm held hundreds of millions worth of the cryptocurrency.
The Telegraph report indicates that while the firm has largely derisked its bitcoin position, it still holds a few hundred million worth of the cryptocurrency:
“The 2.5pc allocation we made in November across all our funds, which totaled around $600m. This has more than doubled so we decided to take out our ‘book cost’ and take $650m in profits. We still have around $700m left in and are currently up by $750m overall.”
According to blockchain analytics firm IntoTheBlock, BTC is currently “mostly neutral” as per the firm’s seven core metrics. Three of those metrics currently are “bearish,” one is “neutral,” and the rest are “bullish.”
Like last week, larger bitcoin holders have been accumulating the cryptocurrency. The concentration metric, which tracks how centralized bitcoin is across top addresses, has been increasing yet again. This coincides with the narrative that smaller holders are dumping their bitcoin into the hands of larger and potentially institutional accumulators.
The current bearish signals are related to net network growth and large transactions. This trend may signify that there is decreased network activity because there are larger holders accumulating, as opposed to selling their tokens en-masse.
While on-chain trends are bullish, it’s worth noting that the public’s awareness around Bitcoin as signified by Google Trends has been on the rise. Twitter engagement has also about Bitcoin and Ethereum has also grown, signifying that there is an increasing retail bid in this market, as well as an institutional one.
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